City Council - Regular Meeting

meeting to order on this 20th day of April at 6 pm. If we could all stand for the pledge of allegiance. I pledge algiance to the flag of the United States of America and to the republic for which it stands. One nation under God, indivisible, with liberty and justice for all.

I'm Miss Wendy. Roll call. Thank you. Heather Watland here. Rob Toyer here. Ivan Gallardo Van Ornum here. Mich here. Nathan SM here. Tim Abrahamson present. Alicia Novak here. I move for approval of the agenda. Second. President. All those in favor? I.

Any oppose? Motion passes. All right. Um, we have a child abuse awareness month proclamation. So, Heather Watlin will be reading that for us. Child Abuse Awareness Month. Whereas children are our nation's most vulnerable members as well as our nation's most valuable resources helping to shape the future of Arlington. And whereas positive childhood experiences like loving caregivers and safe, stable, and nurturing relationships can help mitigate trauma and the negative impact of adverse childhood experiences to promote the social, emotional, and developmental well-being of children. And whereas childhood trauma can have long-term psychological, emotional, and physical effects through an individual's lifetime and impact future generations of their family. And whereas childhood trauma, including abuse and neglect, is a serious problem affecting every community in the US. And finding solutions requires input and action from everyone. And whereas children who live in families with access to concrete economic and social support are less likely to experience abuse and neglect. And whereas prevention is possible because of the partnerships created between families, prevention advocates, child welfare professionals, education, health, community, and faith-based organizations, businesses, law enforcement agencies, and local, state, and national governments. And whereas we acknowledge that in order to solve the public health issue of abuse and neglect, we must work together to change hearts and mindsets through storytelling and sharing, center the needs of families, break down bias and barriers, and inspire action from expected and unexpected partners in prevention. And whereas we are committed to advancing equitable, responsive, and effective systems and ensure all children and

families are healthy and thriving. And whereas we recognize the need to prioritize kids and invest in more prevention initiatives like home visiting and family strengthening policies, economic support, and community-based child abuse prevention programs at the national, state, and local levels. And therefore, Don Vany, Mayor of Arlington, does hereby proclaim April as National Child Abuse Prevention Month in Arlington and urges all citizens to recognize this month by building a narrative of hope for children and families through collaboration in the creation of an ecosystem of primary prevention.

Nice. Thank you, Heather. Any anyone in the audience for public comment? Oh, go ahead.

I assume I need to share my name. It's Holly Sloan Buchanan and I live at 6811 Woodlands Way. And I'm just here because I want to share that our church is doing um a presentation on biblical citizenship. And as we know that this is based on our country founding father's intent for a successful independent and free country. We've had one class and it was excellent. There are seven more classes and you definitely all are invited. It's at 6 o'clock in the evening on Sunday evening 6:00 to 7:30 and it is at Atonement Free Lutheran Church which is on 172nd Street. So please come. It is wonderful.

Thank you Holly. And that's it. Right. Okay. I move for approval of the consent agenda as noted. Second question. All those in favor? I. Any opposed? Motion passes. All right, we'll move on to new business. Uh Jim Kelly.

Thank you very much, Mayor Prom BL and council members. This first item before you is for the procurement of property for a future uh city of Arlington potable water well site. Uh the city of Arlington has been looking forward towards the future and based on a study that was completed by Snomish County in 2017. There's going to be climate impact changes to the still river uh some with flooding during the winter and droughts during the summer which is going to impact our howler south wellfield. As such we started looking for long-term solutions to be able to provide the community with a potable water supply. We eval evaluated five different sites and we determined that the location on the north side of the river is within our potable water right withdrawal area and it provided the best long-term future for our community. Uh we then started negotiating with a landowner who owned five parcels out there totaling 36.93 acres. Um, Simon Co-Star is his name, and he didn't want to split the parcels up, so we had to go in and buy all five. The parcels appraised at $1.3 million. We negotiated with Simon. Uh, and we came to a an agreed price of 1.2 million, of which Simon has also agreed to donate $200,000 to the city of Arlington towards uh our well purchase. So, um, we have a net purchase price of $1 million, and I am recommending that the council approve this purchase and sale agreement so we could move on with the property purchase.

Any questions for Jim? Avon? I just want to I just want to clarify one more thing. Just um, in the actual purchase price contract, it does say the 1.2 million, but we're only actually paying him 1 million because he's donating the 200. That That is correct. So the check is actually just for the million. That is correct. Okay. All right. No other questions. Go for a motion. I move that the city of Arlington approve the coer LLC property purchase and authorize the mayor to sign the property procurement documents subject to final approval by the city attorney. Discussion.

All those in favor? I. Any opposed? Motion passes. Thank you, Jim. You're welcome. And we've got you up for the next order of new business.

Okay. Um, thank you very much, Mayor Pro Tim BL and council members. The second item before you is more property. Um, we are in the process of obtaining all the rightway necessary for us to construct the 180th and Smoky Point Boulevard roundabout. This property purchase is for the Northwest Corner from the Bellon Investment Group. The appraised value of the property came in at $198,000. uh we negotiated with the Bellon Investment Group and we agreed to go 13% above the uh appraised value and settle on an agreed price of $220,000. Uh it is my recommendation that we move forward with the purchase of the rideway at the northwest corner of the future 180 180th roundabout from the Bellon Investment Group for $220,000.

Any questions for Jim? Tim. Yeah, Jim. How many more parcels are we looking at needing to get rightaways for in that area? One last parcel. Thank you. All right. No other questions. We'll move for a motion. I authorize Oh, yeah. I authorize the city staff to pursue the right of way acquisition from Balon Investments for a sum in the amount of 220,000 and authorize the mayor to sign the RO/TCE procurement documents subject to final approval by the city attorney. Second discussion. All those in favor?

I. Anyone opposed? Right. Motion passes. Thank you very much. Thank you, Jim. Next up, um, we have our financial report. Shelby,

good evening. Thank you, Mayor Prom and council members. Uh, so we're going to be talking about the 2025 financial report. So, we're going to do a blast back to the past. It feels like 2025 was so, you know, a couple months ago. Well, we're still uh talking about it. So, want to give you the uh final information for 2025. And I think this will be helpful too for a retreat on Friday so you can kind of see the full picture of where we ended um for the year. So I'm going to start with uh sales tax as usual. Um and so just looking at overall sales tax trends from January to December. Uh we experienced an 8 and a half% increase over 2024. Uh this is um good compared to 2024. It was a 14% decline from 2023. Then 2023 was a 17% decline compared to 2022. Uh so and the last time that we experienced um an increase in sales tax revenue was back in 2022. Uh which it increased steadily by 18% compared to 2021. But that was the last time that we had uh more construction sales tax when we had the Amazon facility construction. So overall at year end sales tax revenue reached only uh 93.8% 8% of what we had budgeted though. Um and while November and December we did see increases in sales tax, it's still we still fell short of our um budget. And um we're going to go over our three main uh sources of sales tax revenue for the month or for the year. Uh so retail sales tax, which is our normal bread and butter, uh represents 46% of all um of the 2025 sales tax revenue. Important to note that retail sales tax revenue is up 3% um from 2024, but overall in the past five years, we're not seeing a significant net change in average in those four years in retail sales tax.

It's very flat overall. And then uh for services, this accounts for 22% of 2025's total. And this does demonstrate consistent growth, averaging a 9% annual increase since 2022. And then construction sales tax, the third um largest uh contributor, uh contributes 15% of 2025's total. And this was a uh sharp 25% increase compared to 2024. We had some um bigger construction uh projects in the city which uh contributed to this. And this is a significant improvement since we saw sharp declines 56% in 2024 uh versus 2023 and 43% in 2023 versus 2022. So as always going to say though construction sales tax is uh one-time funding. It's not dependable. It's whenever those um new construction projects happen within the city. And so um we end up um transferring those funds to capital projects and um the public art fund because it is one-time money and not something that we can uh depend on for the um long term. So uh anyway, those three categories generated 6.3 million or 83% of the total 7.6 million in sales tax. Uh other major category is property tax revenue. It represents 16% of our general fund uh revenues and we experienced a 3.47% increase compared to uh 2024 and collected almost 100% of our budget. So that one looks really good. Utility tax revenue represents 12% of the general fund budget and um this category increased by 7% compared to 2024. This is very dependent on population increases and so I gave you some information there on how our population has changed over the year or the last

couple of years I guess. Um so OFM which is the office of financial management of the state um gives population estimates and Arlington's population increased from a little over 19,000 in 2020 to a little over 23,000 in 2025. So that's why we're experiencing an increase in utility tax revenue. Next category is criminal justice sales tax. Oh, by the way, this report is a little bit longer because it's a full year. So, bear with me. It's a, you know, full year's worth of activity. So, uh, criminal justice sales tax represents 2% of general fund revenues. Um, this is a sales tax, uh, collected by the county and then, um, is restricted and must be used for criminal justice purposes. We experienced a seven 7.8% 8% increase for 2025 compared to 2024 and collected and almost 106% of our budget. Licenses and permits are licenses for businesses, occupations, and animal uh licenses. And then non-development related permits such as gun permits. This only represents 1% of the general fund. And this actually decreased um uh by 5% from 23 to 24. But in 2025, we're seeing a 5% increase and we were but we're only able to reach 90% of our budget um for this category. Leaseold tax revenue uh represents less than 1% of our revenues. And um leaseold excise tax, if you're not aware, is when uh we rent out property to uh other local businesses. So we are a taxexempt entity um being a government and so we u don't usually have to pay property taxes but when people rent our facilities then they do pay um instead of property tax what's called leaseold tax and so um as new uh tenants and businesses come into

the airport and rent out um the facilities there we are expecting more excise um uh leaseold tax to come in. We have been showing modest growth in this area um but it's expected to grow um in 2026 and beyond. And so we'll continue to um look at this. It's not a major funding source, but just something to uh recognize and know that it does make up um part of the general funds budget. Okay. Now higher level view overall revenues. Uh the general fund was budgeted to generate uh $25 million in revenue. However, um collections only totaled 23.1. So, we didn't meet our revenue target for the year. Um this shortfall was mostly um due to the two major revenue sources of property tax and retail sales tax. Uh they came in below our projections. We thought that they would be higher and um quickly in 2025 saw that you know our uh revenue projections were higher than what we could um anticipate. And um then that's when we started to build contingency plans and make reductions to our expenses knowing that this was going to be the case. So on the other side on expenses, the general fund um was budgeted to spend 25.7 million but we actually only spent 23.7. So those um expense reduction efforts did work and um that's why that um that is lower than what we had projected. Okay, the next paragraph um I'm sorry but there was a typo and well not just a typo. whole section is actually incorrect. Um, so you might want to write down what it actually is. I'm so sorry. I did this report a couple of months ago and then I didn't go back and change it to the final number. So, my bad. I won't do that again. Uh, so the general fund ending fund balance, which is my favorite part, so I can't believe I missed this part, but anyway. Um, as of uh December 31st of 2025 is 6 million, just a little over 6 million.

Um, this total includes the twomonth required operating reserve. So, this is why this is a very important piece. Um, we had budgeted for the ending fund balance to be 6.16 million. So, we didn't get there. We're um 160,000 short of our projections, but got really close to um what we had projected, which is a a good sign. And uh 6 million in ending fund balance is a good number to have. It's um uh good cushion, stable for the future, but we will need this in 2026. So when we talk about our at our retreat on Friday, uh keep this in mind. And then um for 2026, expenditure growth is on a um higher trajectory than our revenue growth. And so um what happens and we'll talk about this more, you know, in the future. Um but ending fund balance, if our expenses are higher than our revenues at the end of the year, we need to draw from that ending fund balance. So it's like a bank account or savings account, and we need to take money from it. And so since our expenses were a little higher than our revenues, we did have to pull a little bit from that ending fund balance. And so that's why that 6 million needs to be there as a cushion um when that happens. Okay. Now, we're going to move on to we're done with the general fund. We're going to move on to other funds. Uh the next piece is transportation sales tax. And um transportation sales tax funds pavement preservation efforts. We experienced a 9% increase in revenue compared to 2024. Um but we did only uh collect 90.3%. So another category we're just shy of our budget projections. The streets fund is um uh mostly motor vehicle fuel tax. So all of the fuel tax for um anyone who um drives in their car or any other uh modes of transportation. And this funds our street maintenance. And um this was an increase of 1%

compared to 2024. And um we did not meet our budget for this revenue uh goal. And so we're about 30,000 short of that that budget. Next is the growth fund. Uh the growth fund is from traffic, park, and other mitigation fees. And the balance of this account is at 4 million. 1.7 of that is for park mitigation. 1.3 million is for transportation mitigation and 950,000 of the mitigation fees were spent in 2025 for the Smoky Point Community Park project and mitigation fees must be spent within 10 years of when they were received. The public art fund is beginning a balance of 139,000 for 2026 and this is higher than the we were able to transfer 100,000 of construction sales tax funds over to the art fund. It was getting low as far as their um their fund balance and so we're able to transfer 100,000 instead of the 20,000 that was budgeted which is good news. uh we should be able to fund this um next major project which is the Smoky Point roundabout art installation that was delayed to 2026 and that will cost about 49,000. the cemetery fund. Um earlier in the year, the cemetery fund was needing of some cash flow, and so the general fund provided a transfer of a little over $5,000, but then after strong um December cemetery sales, they were able to reimburse the general fund that $5,000 back. The airport fund um reached approximately 94% of the budget, which is uh 9% increase compared to 2024. And uh airport uh rental income is also increasing

and um we received about 3.9 million which is only 96% of what we had budgeted. We had some tenants that um moved out and we're hoping for 2026 to be at full occupancy all year. So that rental income will come in as we projected. lodging tax fund. Um, at the end of December, we've collected 162,000 in revenue and we had only bud 40,000. So, this is a 6% increase. It's almost um ELTAC um funding season. So, we will uh look at that and see where we're um where we are for that for the year. As of now, we're being told that the hotels are saying that they um aren't experiencing as many uh stays as they have in uh previous years. So we'll look at that and see what type of an amount we can award um for this next year. Give you recommendations for that. Uh the REIT funds, REIT one and REIT two is um estate excise tax on property sales and as you know mortgage interest rates are still high and also property values remain high and this is discouraging uh people from buying uh homes it seems and so uh this is down approximately 16% over 2024 and this is the steepest decline we've seen in the past few years. Otherwise, we've been experiencing a 6% decline um since 2022. We only collected 87% of our budget in that category. Water, sewer, and storm funds are um stable. We've uh for 2025, we saw a 9% increase in water, 8% in sewer, and 4% in storm. Um these are mostly due to usage increases like we said population increasing and then also the utility rates escalate by the CPI of the area every year. Once a year we like to look at our debt

obligations. And so here's a table showing all of our um debt from 2025. You can look and see um the balances left. So, at the end of um December of 2025, we owe almost 21 million and most of this will all be paid off by 2034. Next is investments. Um, our financial policy allows us to invest up to five years in um, uh, agency bonds and um, at the end of December 31st of 2025, we had 58 million in cash and investments and due to that we um, receive interest and so interest for 2025 was up 13% compared to 2024 with those rates just like mortgage rates and and other um, interest rates have been up recently And so we um experience higher um interest rates for the year which is great. Next key area is reserve policies. So in our financial policy we have uh looks like four different reserve policies and you can see all the details about them but we are meeting all of our reserves as of 2025. Um, our general fund is adequate for a reserve. Our mandatory reserve, our equipment replacement and our capital, uh, facilities funds uh, don't necessarily have a targeted amount, but just have an adequate amount where we can um, fund future projects. And those are also um, have adequate balances going into 2026. And then the last piece, I promise, is about uh, the department updates. I wanted to highlight um some information, some statistics about our area and what we've done for the year. And so um just looking at total dollars receded, over $9 million came through the front desk

of the office this year, which is an 8% increase. We processed a 1% more of utility bills. We're up to over 85,000 now. um 95 start and stops of utility services, which is an 8 8% increase, which we're trying uh hard to always keep on top of that and let uh customers know in advance, you know, this is happening and try to get that down as much as possible. Uh we processed over 2,700 checks last year, which is a 1% decrease. Uh which is because uh for a good thing, we were able to add AC payments processed in 2025. So now we don't pay all of our bills just in check anymore. Able to process electronic payments as well which was um 550. So quite a few aes um employee hours increased by 4% 19% increase in time sheets and a 5% uh decrease in phone calls received. We've been working hard to help customers pay online if they would like to and that um where they used to call and try to pay on phone and you know on on the telephone more often and so that 5% decrease is mostly due to that with more online bill pays and that is 2025 in a nutshell.

Any questions for Shelby? I do. Yep. Nate, so um for the lodging increase, do you happen to know the pattern or why it suddenly increased last year of like because the lodging tax it said it was a major increase? Do you know specifically why?

Uh well, hotel stays must have been up. Um the uh rate hasn't increased. Um and so we'll get some more detail to uh we did submit our um so we're in the middle of submitting so we submitted the 2025 report of hotel stays which are kind of an estimate. A lot of people you know submit that in in the report. It's hard to say. Um but we work with our hotel partners and we'll get more um data on that of actually what they saw in hotel stays. Um but it must be that that's up. Um and then uh right now like currently you know since January they're experiencing a decline is what um the best western has said and I believe the medallion as well. So

thank you. Not sure why right now but yeah. All right. Thank you so much. Appreciate it. All right. That concludes our new business. So we'll move on to comments from council members. Ivonne or Nathan? I don't care. I'll go last because I have a lot. Okay. Okay.

So, um this week I uh was able to uh be the judge for the civics be on Saturday and that was fun to see uh sixth through 8th graders come together. There's three from our area uh that had written a u an essay months ago about maybe an issue or a policy thing they would like to change in their community. And uh several of them were uh very deep thoughts for a sixth, seventh or eighth grader to have. Uh one was financial literacy being introduced into schools. Another one was little libraries being introduced more to communities for reading engagement and uh another one was um how to improve 530 uh as you enter into town what to what they want to see. So that was very interesting to see um their thoughts and how they would like to have a solution to a problem. And it was fun to be a judge with a Washington state representative in the 39th district, Carolyn Eslick, and Mayor Lebec, who is our school board, Arlington school board president. So, it was fun to to get to see all of those uh families get involved civically. Um, I also went to the Save a Much Shred event at Jonnos Scott, the end of town by the co-op, and got to pet some awesome little puppies, and no, I did not buy one, even though I wanted to. Um, I went to the state of the county with Nate Nearing. uh for this the Chamber of Commerce, Stilly Valley Chamber of Commerce with Councilwoman Michelle Ble and that was great to see his vision of uh hope for our communities based on how he's helping with criminal aspects with uh how to deal with crime and homelessness and family interventions for things or family oriented parks um and recreation as well as um being there for us as community members when there's

a problem or even if there's something that's fun. Um, and then we also did a tour, Tim and Michelle and I, with the North County Fire with Chief Kraky and got to tour the Arlington side of North Car County firefighters or fire stations and got to see how um those stations work and help our community as well as help those in Stanwood and surrounding areas. So, that's been my week or updates. It's been great to get to know and see all the different aspects of community. So there you go. There you can go.

All right, Ivonne. Um I just want to give Well, I have a few, but um my big one is I just want to give a shout out again to the Stilly Valley Chamber. Um Diane does a great job of organizing a lot of a lot of great events that help promote Arlington. And if you're listening, we love our little town and um we have a great town. So spend the night, make a whole weekend of it. We have great places to go eat. After the Civics B, I um I was able to I was there at the Civics B as well. And watching those kids um you can see that their ideas, they're amazing. And we actually got a couple of uh flyers to kind of share with city council later, but um and um just seeing them put that much work and effort into their essay was really in really exciting. Um, but then afterwards I did the same thing. I kind of walked around town. It was too nice to go home and being able to go see the Save Mud and then walking over down and popping my head into the pop shop. If you guys if nobody's been going to it or haven't you haven't gone yet, um the pop-up shop is a really cool little place on the weekends to there was food there this weekend. I'm not sure how often they're there, but that food was looked amazing. Um, and then Revival on Maine sadly is closing, but we went in and got to go see some of their stuff. So, if you haven't been in, please go support them. Um, well, on Thursday, I um was able to share some of my expertise. Um, and I was able to lead a class with the business workshop for the the chamber. And again, that's another great opportunity if any small business is out there looking for business workshops. They're free and they're given by great local community leaders that um we have website design and marketing and just different kind an accountant like comes in and teaches you how to do some bookkeeping. Um and so um in that class though I learned that two local businesses one grants with activates

nomish county through economic alliance and so they're looking for partners to help them with their watch parties for the world cup. So, if anybody's listening and is going to be doing a World Cup watch party, um please let us know. Um we I can get you in touch with the two businesses that won those grants and we can promote that. Um and then um I was also lucky enough to be able to connect with Michelle and do connections with purpose and we went out to uh three places this weekend, but I'll let Michelle talk. That was our Friday.

But oh my gosh, Friday was amazing. It was actually pretty revitalizing. Um, and so hopefully we can get Duncan to come out and also he um has never done a presentation for city council but said he would be willing to. So I hope he does come out. Um, but yes, that's all my stuff. Cool. Tim.

Yeah. I just wanted to kind of add it on to, you know, uh the piece with the uh the FIFA, you know, celebration zones. And we had a great uh meeting on Thursday with some of the other electeds and got a great briefing about all the different areas that will be doing these zones. And I really really want to encourage everybody to check out their website, check out where these zones are at, and check out where these watch parties are at. um and and just enjoy yourselves uh as FIFA comes. It's coming soon, June 11th. Uh and uh make sure that we're supporting that and and supporting a wonderful uh sport uh that is good for activity as well. Um the only other thing I wanted to add was I had a really great briefing with the board of health. Uh, as you guys know, I was elected to be on the uh the elected member for the small or the medium to large cities uh for board of health and I had a really great discussion with their leadership and their team of the programs and what their expectations are. Um, as a county, we're at the cusp of this board of health being, you know, not a directorship anymore, but actually a a county board of health and being able to help shape that and be able to make our communities within Snomish County safe. Thanks.

And you volunteered at Perfect Paws or something, right? Perfect pals.

Oh, perfect pals. I just knew it had to do with fur kids. Um, so just to follow up on a couple things, the state of the county was and Paul was also there. Um, was amazing. Uh, Nate Nearing does such a great job of educating the audience and he's so well spoken and oh Randy, you were there too. Um, presents in such a manner that I know I walked out thinking, dang, I just learned a ton of stuff. Um, so he's pretty amazing. So that was a wonderful event. And then the fire station tour was a little different than when Ivonne and Leysa, we all went with the prior chief. Um, Kraki um really gave us an education on the history of the fire stations in Arlington and we got to meet all the different um of the people that serve out there. So, it was really nice and he did a really good job with us really teaching us about Arlington and the fire stations. And then Ivonne and I connections with purpose. I think we've done almost 20 of them in the past seven months where we're really out involved with senior living facilities um and retirement homes. So we've done so many of those. Uh our recent one is Duncan Clawson who's the voter education um uh director for Stoomeish County. So it was really cool that he was able to go out and teach the process. He invited everyone to come to Everett and see the very transparent process of counting votes. So he was just a wonderful human being too. But yeah, so that was it. Oh, Heather. So it's um uh this Sunday, Eagle Creek sang the national anthem for the Mariners game. And it's just really exciting for them. I attended um because they don't just ask to do it. They have to work really hard. They have to make a video. They have to send it in and they

have to get selected. So um we Eagle Creek has been selected several years in a row and it just proves how hard those kids work. Um and they get selected and they do awesome every time. Thank you. And then that wraps up comments from council. So we'll move over to Paul. Just one item tonight. Just a reminder, retreat uh Friday here and uh we'll have we have a lot of slides to go through. So, it's leaious said it was ending at two or something this year. That was kind of cool. Yeah. When when Yeah. Whenever you want to

Thank you, Paul. I can add some more slides if Yeah, I know. You always can add Um, so anything else from anybody? All right, move to adjourn. Second discussion. All in favor? I have a good night.