City Council - Regular Meeting

10/23/2025 Des Moines City Council meeting is now called to order. Council member Grace Matsui will now lead us in the pledge. Please stand if you're able.

I pledge allegiance

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.

Well, thank you all for being here. I hope some of you have a sweet tooth. Happy Halloween early because, we don't have a kid. This is the last council meeting before we get to enjoy, Halloween. So, thanks for taking some time out of your evening to come and join us. Those of you who are online watching on channel twenty one or or online, please know that we can't attend to our phones at the dais. So if you do have technical problems, please email cityclerk@DesMoinesWah.gov. Please let the record show that all council members are present, the council member Nutting will be joining us remotely tonight. Do we have any correspondence not previously received by council?

No other correspondence, mayor.

Alright. Thank you so much. So now it's time for comments from the public. So tonight, we are also going to have a public hearing. So that's going to be in regard to property tax. So if you have public comments in regard to that issue, we ask that you please hold your comments until the public hearing. We'll have a special segment for public comment at that time so that your comments can be held in the record for that issue. Also, a reminder that it is campaign season, so we won't be able to receive any comments that could be misconstrued as support for any particular candidate tonight. We ask if you do come to the podium that you keep your comments respectful. And when you come up, please state your name and your city of residence.

Okay. So we don't have anyone signed up. Is there anyone who has come to tonight not realizing that they needed to sign in in order to give public comment? Somebody did sign up. Oh, no worries. Okay. So it looks like we do have is that you, Bettina? Alright. Well, go go ahead and come on up.

Okay. Good evening, council members and fellow residents. I'm Bettina Carey, and I live in the Marina District. And tonight, I wanna talk about a word that gets thrown around a lot, and it's called transparency. It's often used to suggest that something is being hidden or that the city government isn't open.

But if you've been paying attention in this past year, that simply isn't true. We now have more transparency and communication than ever before. There are second readings, managers' reports, the mayor's minutes, department updates, surveys, and well prepared slide decks on every major topic. Council members meet frequently with city manager to make sure they're heard. Meetings are open to the public, in person, now on Zoom, live TV, and on YouTube.

Our finance director has given us direct links to live financial updates and has explained them to us in plain language multiple times. On top of that, city staff have shown up at markets at the market all summer long, answered questions, and shared information face to face. And it was really great to see everybody, all the staff that participated. The new city manager has improved communication through email, social media, and community updates, and is even working on a new website to make information easier to find because it is quite difficult at this point. So when people say there's no transparency, I have to ask, what more do you want?

The information is out there. It's accessible, but transparency is a two way street. The city can make information available, but residents have to take the time to read it, to watch it, to attend meetings, to understand what's even being shared. Like any change, it takes time for people to notice progress, but that progress is real. And when we ignore it or continue repeating that nothing's improved, we do a disservice to the people who've worked hard to make things better, and they have.

As finance director Jeff Friend said during the city council's October 3 meeting last year, we are committed to ensuring the city's financial stability and transparency through a wide range of services. We are committed to it, and the way we can improve it is that we're just going to keep doing a better job of transparency. So when we get suggestions like getting long term debt information out to the public, we're going to listen and act on that, end of quote. That's real accountability and a clear example of transparency in action. You can watch the entire presentation by clicking the link in the comment section that I will send this all to you guys.

And being a citizen is more than just living here. It means participating, showing up, asking questions, and doing your part to stay informed. It means working together even when we disagree. Let's make our community better and stronger. Thank you so much.

Thank you, Bettina. So is there anyone else who didn't realize they needed to sign up in order to give public comment tonight and would like to comment? Alright. Thank you. Thank you, Bettina. So next up on the agenda is our regional committee reports. And historically, we have operated on separate committees with committee chairs. We're running a pilot right now until after the first of the year where we have what we call a committee of the whole. So it's because we do not have chair reports. We do have council members that serve out in the region on different committees and tables, so this is an opportunity for them to share or all of us to share what we may have been discussing or ways we've been advocating out in the region.

So I wanna open the dais to anyone who has a report out. Councilmember Harris.

Thank you. I attended the recent regional transit committee advisory thing, and we went over this is for King County Metro, and we went over the budget dash board, something I have been nagging about for about, I don't know, three hundred years. And, it went from being less than optimal, see what I did there, to where it now is truly useful and everyone uses it. And it's worth noting I mean, they put a lot of effort into it because a couple of weeks ago, both on Facebook, Nextdoor, and stuff, there were several posts about the poor state of some of the bus shelters. And so my next snag campaign is to add to the dashboard a shelter service schedule.

Because the thing is is that I use transit all the time, and there are moments where it is unkempt and there will be an unfortunate unhoused person, you know, and so forth. But when you see, like, a 100 posts on social media, it creates the impression that, like, you know, I have to be on this when in fact I know because I do ride the thing all the time that it's on a schedule. And people should be aware of that schedule just so they understand that King County works on this stuff. And maybe it needs to be more often and so on, but, just having those numbers, I think, would be helpful, for the public to get a sense of, you know, that it's not something that they're unaware of or they spend significant resources on it. And having these metrics are the way to get to even better service.

I think that's it. Thank you.

Thank you, council member. Council member Mahoney.

We recently had the skateboard meeting, which is the South Cities, basically, the transportation port for the South Sit Sound Cities on Tuesday. We talked about some of the revenue and state federal policy issues. Particularly, one of the things that stood out is the the rev the revenues or the the monies they need to do all the transportation projects for twenty five to twenty seven is a shortfall of 412,000,000, and this is take into account all these federal dollars are still in limbo. And from the plans that they have the long longer term from 2729 is 477,000,000. We also discussed the skateboard's version of legislative agenda that'll go to the go before our state legislatures as well.

There's a committee formed to discuss that, but we all kinda gave our points. I'm trying to get the ferry on there, just so you know. And and and so, you know, it it was a it was a good discourse and so forth, but the struggle continues to be the uncertainty at the federal level. And then, obviously, the revenue generated at the state level and a lot of budget shortfalls and conversations about a lot of projects just aren't gonna happen because the state just doesn't have the money and what those are gonna be and the priorities and stuff like that. Obviously, the PSRC transportation board is working on the same issue, which I reported on last meeting.

But it's trying to get roads done when the costs keep going up and the money doesn't continues to be a challenge. So continue to represent us the best I can for the city of Des Moines.

Thank you. Any other reports? K. So I attended Puget Sound Regional Council's executive board today, and we were briefed on several items. One of them was the Puget Sound Clean Air Agency. They gave us a briefing on the regional comprehensive climate action plan, and they're looking for input right now from citizens from all over. You can go online. I'll give you that address in a moment if you want to. But I asked today you know, Pugetown Regional Council Vision twenty fifty has a direction for the regional policy to attend to aviation impacts in the in the air. It's one of the items in there.

And they so in the briefing, it wasn't mentioned today. So it's for to our communities, right, our airport communities. That's it's one of the deals. We're even installing an air quality monitor, but they didn't mention it in the briefing, so they referred me to the their report, their draft report, and it's buried in there. It's in there.

But so I would say two things. If you're interested, if any of the public is interested, go online. It's c a a, Puget Sound Clean Air Agency, /conveyo.com, konveio.com, and you can give input on their plan. The aviation admissions segment is on page 56, and it's, like, mentioned once. So that could be part of the input.

It's like there's not enough of there's not enough addressing this issue for over 1,300 operations per day and growing quickly. So that's my encouragement, and that's all I had. So we move to the next item, the city manager's report, and turn it over to city manager Catherine Caffrey.

Thank you, mayor. We have two items tonight. The first one is in regard to a letter that the city of Burien city council recently unanimously voted to send to the port. It's in regard to port packages, which are the the noise insulation packages that, the port offered residents, years ago. Des Moines has quite a few of those, here in the city.

I we've I've estimated a little over 3,500, but I can't find the exact number. But it's still a pretty significant number that are in this community. And so as you probably are aware, there's been a lot of discussion about those packages needing to be repaired or or there's some care that is needed to those now that the years have gone by. So the city of Burien recently sent the port a letter pretty strongly. You know, I think I can use the word demanding, really, the port address this outstanding issue.

We are bringing it to you to see if you are interested in sending something similar. If so, I think a path forward could be to ask our airport committee to take this up. They did briefly talk about it at the meeting they had last Monday, and they are interested in working on it if that's of your interest. So they would draft something that's sort of, you know, true to Des Moines, not just copy Burian's letter, and then bring it back to the council for consideration if you are interested.

Any questions on that or comments? Councilmember Harris and then councilmember Maloney.

Well, I I would certainly support that, and I'm I spoke with chair Duesenberg afterwards, and I he told me he it was his understanding that, the group had spoken and was in favor of, asking the council to simply sign on to it and forward it immediately to the port, because of the urgency of the matter. And I just wanna put this out there that, in my experience, it may just be sheer coincidence, but every improvement in port, legislation seems to happen before an election. Could be just a coincidence. And so at last night's, candidate forum, all three candidates spoke. Yeah.

We gotta do more about those things, and I sure would appreciate getting that letter to them, you know, before election day if possible. That's my but that was my understanding what Joe said. So I just it just seems to me that putting it off for a month, I would it's it's good to have them weigh in, but just if they're already in agreement, I think we should move forward now. Thank you.

Sure. That's absolutely an option if you wanna go that path.

Okay. Council member Mahoney.

Two things. One of the points he made, the election's not gonna matter at the court. They're all three running unopposed. I don't think anything that's gonna be done is gonna be swayed. But I'm gonna point back to when we were talking about our legislative agenda. This is the same thing that everybody's done time and time and time and time and time again. They write these letters. They demand this. They demand that. And the truth is simple.

There isn't the money to do it. Nobody's gonna come up with it. Now people will point to their budget and the state's budget and so forth, but there's not gonna be the money unless we come up with something like I was proposing before in a legislative agenda and we can persuade cities like Burien and others to support it to get this negative impact transportation fee, there's never gonna be the money to address this or the health issue or the quality of life in the cities. So we you know, I'm not gonna oppose us sending a letter, but it's just another letter. If we don't change the game and do something distinctive, we're never gonna get anywhere.

So I'm just gonna reiterate that as as the point I struck before, and it needs to be struck again because, yeah, this is this is nice. And and it's gonna be a letter we can send, but history tells us it'll do

no good. And I don't mean

to be the pessimist. I just think if we can find a way to come up with the money, then we come up with real solutions.

Yeah. So by no means does this letter preclude anything in the legislative agenda, and we'll be bringing you back a draft legislative agenda at the November 6 meeting. So this is really just sort of a, you know, in addition to if the council chooses to do that.

Before I I'm checking. Do you have a question, council member Natti? So before I call any council member Harris, could you address are you aware of any issues of timeliness? Because I thought I heard that it wasn't that it wasn't that hot that he I

am not aware of there being something immediately on fire with this. As you know, the the port recently did this study where they went and looked back at the port packages. They concluded, you know, there was nothing there, but at start we had our start meeting last night. It is this circular conversation. So I say that because I am not aware of there being, like, a a due date for something on this, just it is a definitely recurring and serious issue. This is my understanding unless council member Harrison has something

I don't. Okay. Council member Harrison oh, well, council member Harrison and council member Oscar.

Thank you. I would just say that, you know, if you go to STNI info, it will tell you that there are 3,844 port packages remaining in Des Moines, and the Port Of Seattle has already budgeted. They've had $6,000,000 budgeted for this for two years, and they have another million dollars that hopefully will come from the state. And my my feeling, you know, $66,000,000 is you can do several 100 systems with with that at their scale. And it really they've been at this almost two years, and I would just say that any occasional nudge, the commission can act on any Tuesday and say, okay.

Let's get let's get going on this. But so far, what they have done is spent almost two years preparing a list. And in fact, you know, STNI, we have over 1,300 people who would be on such a list. And just occasionally, you know, electives it's occasionally, the commission can drive the bus a little bit on this. And so that would be my suggestion. They have the money, and, you know, they can start spending it any second Tuesday. Thank you.

Thank you. Council member Oksicker.

I would just point thank you. I would just point out that we did receive a letter from the deputy mayor of Berrien Mhmm. Expressing some urgency that we do this sooner rather than later in order to prevent present a strong regional consensus. So she was indicating that she would possibly be here tonight to speak on her own behalf, but it sounds like, you know, there is a sense of urgency as not letting this drag out. If that we could sign it tonight, she would find it helpful.

So I just wanted to make note that we have received correspondence from Burien urging immediate action. So not that we have to listen to Burien, but it's there.

So any other comments? So it looks like the dis so three questions. Do we wanna move forward with it? The the next question would be, if we do, then how? Immediately or not? So I guess that's two questions. So is there a general nod? I'm gonna say if you're not in favor of a letter, raise your hand. You're not not in favor of the I'm sorry. I I That's alright. Okay. Is really If you're not, yeah, if you're not in favor of a letter, raise your hand. Okay. So we are in favor of the letter. Those who would like to sign on to the Burian letter and let it go forward quickly, please raise your hand.

Okay. 60. So

Got it.

It looks like that's what we'd like. So you guys will take care of that.

Yep. So I'll draft a letter that, like, says we're doing it in concert with Burien. It'll use really the same language, and

we will send it in. Six zero. Point of order. Council councilmember Nutting did raise his hand. So the vote is six zero. Thank you for excuse me. Six one. Six one. Those opposed. I didn't thank you. That was council member Hone was opposed. Motion passes six one. Thank you for the help on that. Okay. So you Yep. Take care that.

On that one.

And then the

second item I wanted to just really share, and I know I recently provided you all with some information, but I wanna do it in this setting too, is there's been so much discussion obviously about city's finances and what are we doing to really ensure we're collecting. And then I was at a candidate forum recently and heard kind of some comments. I'm like, gosh. Is the city really taking the square footage tax seriously? And so I wanna really address that publicly.

So as you all recall, at the 2024, the council approved the implementation of a warehouse tax that is based on square footage, but it's really to sort of capture tax revenues from businesses that don't really pay in necessarily through property tax or through sales tax. And so that went into effect at the beginning of the year for warehouses that are greater than 4,000 square feet. And so those businesses will pay either their B and O tax or the square footage tax, whichever is greater. And of those, initially, we identified 24 effective businesses. And so after a lot of outreach and verification, we found that there's several businesses that, you know, really didn't need to be on that list, and we've updated them.

But the real reason why I wanted to bring this forward is because at a finance presentation that Jeff gave a couple months ago, we talked pretty openly about the challenges we were having with collections. It's a new tax that can be difficult to get compliance on, and so we addressed some of the efforts we were making. So I wanna now kind of give an update on really how much progress we've made on that. So you'll see that when we gave the q one report, we had about 43% compliance. We are now up to 91% compliance.

And we are really bringing in collections and, like, you know, amounts that were past due are really coming in. So we have adjusted our budgeted forecast to 515,000 for this year, and we are fairly confident we will hit it. We do expect that next year will go a little smoother now that some of these businesses are aware of these. I do think, though, just to be transparent, what we've learned is that our initial projection at the '24 was probably overly rosy because I think we didn't take into account that b and o tax or square footage tax component. So we are definitely getting real results and then able to adjust our projections, I think, to be more accurate.

But I do wanna really update everybody that we we are really working hard to get compliance. And as you can see, we're making great strides on that. So I'm happy to answer any questions, but otherwise, I just wanted to make you and the public aware of this.

Questions? Council member Grace Matsui and then council member Oscar.

I was just looking at some of the information that was sent to us in advance, and I wanted to check to see if warehouse or outdoor warehouse space that is vacant is truly supposed to be exempt, because it does say that it's owned, occupied, or used. And so things that are just owned that are empty seem to me to be incorporated. So maybe they're paying the B and O rather than the the storage.

I can look for I'm gonna ask Jeff if because it's my understanding that those are sometimes, like, businesses that are circulating out. So there's maybe a new business that's moving in, and there's that transition period.

Just look into that and get back to that.

But we we will look into that further to confirm it.

Thank you very much.

Council member Oxiger.

Yes. Thank you, mayor.

I'm I'm wondering since ground has been broken and the Business Park West is going in, do we have any kind of concept as to how much additional revenue will be available when that comes online.

Our initial estimates were about 200,000 a year, but I think what we've learned is our initial estimates were a little high. So maybe $1.50, some somewhere around there. But it should be a substantial amount of money that's not included in that

$5.15. Right. Right. Thank you.

Councilmember Harris.

I just want to express my appreciation because even if it's not, you know, I heard even 800,000 or whatever, and I'm like, no. But whatever this is, it's, like, better than zero, and it's really good. And I want to express my appreciation for the presentation a couple of months ago. I just like the port package letter. I think that was very useful because it was just this sort of little nudge.

You know? It's gonna take a while to get compliance, and you sort of have to factor the thing same thing with the pet licenses. But that's a good thing, you know, rather than everything being going hard about it. It's just you know? And then eventually, you get there. And I think you took the right approach. Thank you.

Any other questions? K. K. Great. Thank you so much. Thank you. Is that it?

Yep. That's it.

Alright. Moving on to the consent agenda. Could the city clerk please read the consent agenda?

Item one, approval of vouchers. Item two, approval of minutes. Item three, twenty twenty six business license fee schedule. Item four, telecommunications franchise agreement with Forged Fiber thirty seven LLC second reading. Item five, twenty twenty six vehicle purchase. And that concludes the consent agenda, mayor.

Thank you so much. Do I have a motion? Councilmember Nutting. So

Move to approve the consent calendar as read, mayor.

Do have a second? Second. Councilmember Mahoney gets that one. Is there an item that a councilmember wishes to pull?

Councilmember Harris. Item five.

Alright. Any others? K. Well, we we'll be now voting on items one through four. All in favor, raise your right hand. And it's unanimous. Thank you much. Council member Harris, we'll pass that vehicle purchase to you.

This is actually just a question on the item that and I apologize for but well, I how does this I thought we were sort of getting into having a having a fund for replacements and everything. And how does this am I missing something here, or is this just

Councilmember Howard, yes. We are working on a vehicle replacement plan in '26. That's on my my personal agenda to do. This is this vehicle is is a vehicle. It's a Ford pickup truck. It's a vehicle for our detectives, and it was scheduled to be purchased in in 2026. They requested that we purchase it earlier. They even want one better. They found one that would meet meet the mission, and it's it was a a very slightly used, like, couple 100 miles vehicle. So we're getting about $10,000 deduct. So we decided to jump on that to save the money.

Okay. No. I actually I mean, I made a joke about it, but I was like, 55. I mean, like, where can a fellow such as myself get in on that? I mean, you know, it it seems like a really good purchase for if it's, you know, specially equipped for the

Our our police teach negotiation classes on the weekends. Yeah.

I believe it.

So council member Harris, if you're comfortable, I'm happy to pass the motion to you if you'd like to make it. Otherwise, you can hand it. Alright. Another council member? Alright. Council member Mahoney, go ahead and take that one.

I move to approve the purchase of of of a vehicle identified in Detachment 1 for the total estimated amount of $55,000 and to authorize the city manager or the city manager's designee to sign the purchase order at the at the time they are created.

Second. Second.

I'm gonna give that to council member Grace Matsui. Any discussion? All in favor, raise your right hand. Looks like it's unanimous. Motion passes. Thank you so much. Next up, we have a public hearing. So the purpose this is first reading. The purpose of this item is for the council to consider their annual options with regard to property tax revenue, and this will be our first reading. I will now open the public hearing. We will begin with the staff presentation with our finance director, Jeff Friend.

Good evening, mayor. Good evening, council, members of the public. Jeff Friend, finance director, here to present the, 2026, property tax, levy that is being proposed. I'll start, with, the 2025 property tax levy. Every year, we do this presentation, and annually, we like to emphasize, how the property tax bill works, for residents of Des Moines.

This, on this slide, we actually have, information that comes from an actual property tax bill, for a property in Des Moines. The assessed property value as it shows is $901,000, And the city of Des Moines is one of many taxing districts that are on a property tax bill. So some folks might think, well, I paid my property tax bill. That all goes to the city. We're not that fortunate.

We are one of many. So we rank actually fifth as far as the portion of the property tax bill. In fact, the top districts as far as where property tax funds are going, at least on this bill, is the school district, Washington State Schools, King County, and the fire district. That actually makes up 75% of the pie chart, which appears to the right. And then the city of Des Moines, we get about 8.36% of a property tax bill.

And so this taxpayer, is paying annually to the city $767. And those are the funds that go, to pay for the police. They pay for the parks and rec and all the the services provided by the city's general fund. So you can see the little piece of pie over there in the the pie chart. That would represent how much of the total bill goes to the city of Des Moines.

So that was 2025. What's new for 2026 is the proposed property tax levy amount It would be, $5,920,297. The proposed levy includes a 1% allowable increase of $57,875. So with property tax, a lot of people think that it's based on the value of their property. It's actually we collect 1% of whatever we collected the year before.

So as long as, you know, inflation is above 1%, we're allowed to do that. If it's not, then we have to actually have another ordinance. But, 1% is what they call the lid, but it's capped at that. So the increase from the last, levy includes the 57,000, $8.75. Overall assessed valuation within the city of Des Moines increased by about 291,000,000 to that number.

I don't wanna have to read that. 6,800,000,000.0. A little bit over that. It's an increase of 4.4%. So, property values relate to property tax in the sense of you're paying a thousand dollars, or you're paying per a thousand dollars of assessed value. So it really factors neither into the dollar amount you pay, but into the rate you're paying. So you own your property. Your property goes up in value. What you pay probably goes up in percent, and then that's how the rate is calculated. The city had an additional $37,000,000 in new construction, adding about 31,000 to the overall property tax base.

So the city can, increase the levy 1% every year. We also can add an amount, for new construction. So when there's a new property, say there's new building that's made or constructed, that enters into the property tax, and then they use the value of that, to add to the levy. And then from then on, it would increase 1%. The proposed tax rate for 2026 is an estimated 86.18¢.

It's an increase of 1.2% from the current levy for 2025, which is about a little over 85 per thousand of assessed value. So the total increase, from last year's levy would be about a $132,451. That's citywide. That's an average of about $12.80 per parcel. In King County, we asked how many parcels pay property tax in the city, and it's about 10,344.

History of, Des Moines property tax levy. So this is a ten year graph going back to 2017. You can see in 2017, residents paid about a dollar 51 per thousand of assessed value. And, the last couple years, it's been close to, 85¢. The last year, it was about a little over 85¢, little over 86¢, in this proposed levy for next year.

In 2024, a little over 90¢. So what happens been what has been happening is the values of property have been increasing, but what we collect pretty much stays stable. So that shows why the rates have have dropped over time. And, these are the suggestion motions, to forward this to a second reading. If you wanna forward it to a second reading, these are the motions on the slides. Those the motions in the packets are actually to enact the draft ordinance, but these would forward it to a second reading. And that concludes the presentation.

Thank you so much. So now it's time for public comment. Did we get anybody to sign up for that? Alright. So if you do come to the podium, please keep your comments respectful. State your name and city of city of Oregon. Is there anyone here who did not sign up to speak who wishes to speak in regard to this issue? Second call, is there anyone in the room who wishes to did not sign up to speak and wishes to speak? And third call, is there anyone in the room who did not sign up to speak who wishes to speak? Alright.

So, counsel, do you have any questions? Deputy mayor Steinmetz?

Yeah. Jeff, if I can kinda throw this out there and see if I got it. That we keep hearing there's a 1% cap.

Right.

And yet this reference to 1.2% increase. Correct. Is that from the additional value of property that was brought online that pushes that up a little bit for us, or or how does that work?

Yes. There's three pieces, and the first piece is the 1%. So you have your 1% increase. The second piece is the new construction, as you mentioned. So new properties come online, and they're valued based on their value on the first year, and that's added to the 1%. And then the third piece is, referred to as refunds. So if a property, tax owner appeals, say, their assessment and they win, the county makes us whole. So we add that amount. So let's say you appeal and you get $10,000, we would add $10,000 that we didn't collect originally onto our levy. So those are would be the three main pieces. So 1.2% is because we got the 1% and then those other pieces.

Thank you. That makes it a lot clearer. Any

other questions? Council member Harris.

And forgive me if it's this is a blind side or whatever, but do you happen to know how many people get receive a discount? Like, that that

sort of

thing? No. I don't. I know. Okay.

I'm I'm just I didn't expect. Thank you so much. Alright.

Any other questions? No? K. I will not oh, you do? Okay.

What's, what's our projected 2026 rate of inflation? I wish that the budget or whatever. I'm just saying to counter I mean, we're talking about this 1% hold, and I'm wanna see the difference of what we're up against. Well, I would say

the CPI for June, and I I haven't seen it for September, was 2.7%, and that's coming down. So the prior year's has been higher than that. What it it may go back up. I haven't seen what September's is. I don't know where where it's trending.

But So we're looking, like, between two and a half and 3% probably.

Yeah. That I think that's fair to say.

K.

Tough to obviously, you difficulty balancing the books when you've got that difference annually, and and in some years, we've had it even more of a difference. Correct?

That's correct. Okay. Thank you.

Alright. Thanks, Matt. Any other questions? Okay. I will now close the public hearing. Is there a motion? Council member Mahoney.

I move to forward draft ordinance number 25 dash one zero one, determining the amount of funds to be raised by the ad valorem taxes for the year 2026 for general city expenditures to a second reading.

Do I have Second.

Second goes to council member Nutting. Any discussion? Council member Harris.

It wasn't really a question, but, I wanna thank, director Friend for putting this slide on, just for me, that it it's about $12.80, per taxpayer. And, I find the whole contrivance of Washington state property taxes a complete Rube Goldberg. I'm always I I don't expect anybody to understand it from these presentations. And but just I think people respond to understanding that it's less than $13 per person, and it does a lot for us. So thank you so much for your indulgence.

Thank you. Any other comments or discussion? Alright. All in favor, raise your hand. Looks like it's unanimous seven zero. Motion passes. Councilmember Mahoney, wanna take the second motion?

Sure. I'd be glad to, mayor. I move to forward draft ordinance number 25 dash one zero two, authorizing the increase in ad valorem taxes for the year 2026 for the general city expenditures to a second reading.

Second. Council member Nutting for the second. Any discussion? Right. All in favor, raise your right hand. It's unanimous. Motion passes. Thank you so much. Okay. Next step is new business. The first item is Marina Steps. The purpose of this item is to consider bids for the Marina Steps project and give direction to the staff about next steps. Unintended. So we're gonna have public works director Mike Slavin is gonna give us a presentation.

Alright. Good evening, mayor and Buxton and council. We're here tonight with the Marina Steps bid award. As you're aware, we've been working on trying to get this project out and accomplished for the last several years, and we've given multiple presentations on it. Good news.

We put out the bids on 09/09/2025 this year after going through the value engineering estimates after the previous year's bids came in high. And on October 9, we opened our bids. The engineers' construction estimate for the project was right at about $10,000,000. We received eight responsive bids on a spread between 12.6 for the high and 8.5 for the low. The lowest responsive bidder, was Bayshore Construction.

I'm gonna talk a little bit more about them later, but we have several of the representatives here, including Spencer from, who's gonna be the project manager. And the amount for the bid was 8.537716. So that was pretty good news. As we, presented earlier, we put in two deductive alternates within the bid package, one for the spray park, which was at 396,000, and one for the Vertical Play area, which was for $976,004.25. So that's what the contractors bid to install those within the 8,500,000.0.

So the 8,500,000.0 is all inclusive. The budget. So the budget the value engineering budget we talked about with no deductive alternates was at 8,540,000.00. That was the actual hard bid number. I know we've been, pressured to come up with tight numbers on this project, but it's kind of a unique project a little bit. And so we've had different numbers go back and forth over time. So but this is what we actually have now. It's never a real number till you get a construction bid. Right? So this is what we got.

And then we're at 4.35, and that's for permitting, contingency, internal services, construction management, engineer of record, all those other costs that go into the project. So total project cost from start to finish, after with with this bid number is estimated to be 12,900,000.0. Our revenues for the project, bond proceeds, of course, which we need to expend is at 8,110,000.00. Commerce and stormwater grants. We have two Department of Commerce grants for this project, roughly 2,970,999.

We have 560,000 in stormwater grants. Something to point out on that is is that 200 only 278 is for construction. The rest is for ongoing monitoring as part of the stormwater project that is there. We have real estate excise tax from the city at 1.75. We have onetime sales tax for the city at 500,000.

And then prior to removing the ARPA from this project last December, we had expended some ARPAs ARPA money and some other miscellaneous funding early in the project to tune about 280, and those were spent previous to, like, 2,023. So total cost of the project, for funding would be 12.89, so we balance, which is good news. So Bayshore construction projects. We've looked at what Bayshore's resume is, along with their bid. We had our, our project our our we had our project, construction manager, KPFF, and, take a good look at it and and and to see make sure all the numbers are right.

They look at all eight bids and compared everything and checked and we checked through all of the, previous projects. Bayshore kinda stood out a little bit also because I picked a picture on the upper left there. You see them working really close to other buildings in a very deep shored environment. We know we've had some concerns from the community about building the stairs, so next to the next to the condos. It can be done. It can be done safely. It be done correctly. And and this is kind of an example. I picked this picture to show the council that Bay Shore has done it before. Their flat work and finish work is really is really top notch.

Some of the pictures they sent us were really really kind of looked really good, kind of the finishes we would wanna see in in a signature project with the city. Retaining walls. A lot of retaining walls in this particular, contract. I put a picture in the lower right there of them of doing some retaining wall work that they've done that before. And then always dealing close to the water, critical area stuff. The bottom left picture is a picture of where they worked on a trail dealing with the creek and critical areas. And so it's good to know that they have that experience also. So they meet all. They check all the boxes for the level of experience we would need to accomplish this project. A quick update.

I threw Rodondo in here too because there's always a question about it somewhere along it. Rod Rodondo's been awarded. December or excuse me. November 3, we have a ribbon cutting. We're looking really looking forward to that.

The contractor's really getting excited to move, and they'll be out there pretty soon. And then the marina steps, walking through that, you see we did the value engineering in the spring, cutting out a lot of the, you know, good elements, but perhaps more than we could afford elements out of the project. And then, we did a funding update considerations with the council in August. We went out for bid in September, and here we are at bid award. So it's it's it's kind of nice to be here with a project that's been condensed and and consolidated, and with additional grants we've received and additional funding sources and moving CIPs around, we're able to afford it.

So very excited about it, and we're asking today for the council's, permission to award the contract. And here's suggested motions. Before before we go on to the motion, so I'd like to really point out people that worked on this really hard. You know, Tommy Owen, our city engineer, has been involved with this for very many years. Alyssa Beaver, project manager. Liz, will you stand up real quick so we can get it? Works incredibly hard on this project. Right? And then we have the representatives from Bay Shore here. Spencer, do you wanna introduce your team? Or

This is Craig Crawford, Zach Stroud, John Colford, Spencer Cube.

Alright. So there's our team from Bay Shore that's gonna be working on the project. And with that, the suggestion I'm here for questions, and the suggestion most motions are posted up there. There's two pages of them.

Yes. See that. Okay. Thank you so much. I appreciate it. Questions from the council. Deputy mayor Steinmetz.

Yep. Mike, the vertical play area that was kind of pulled out, that's more than just a slide, isn't it? Isn't that all the play areas on the Well, yes. It is more than just

a slide. I I've got some additional pictures here. I I think I've lost control of this. Yeah. Oh, there you go. So yeah. So it's it's Mhmm. It's an entire area there with multiple different playgrounds coming through. There are slides and ropes. And and so we'll and we as we get to get to build it, we'll work through and see what it is. There's the one version I saw had a tunnel. But, know, as we pick out as place picks out the actual, we have square footages in there. The actual devices have not been chosen yet as part of this. So we'll be picking those out individually as we go through and work through the process.

Alright. But, ultimately, this what that's just talking about the place for the kids to play up and down Correct. Side of the steps.

So if you look at on the on the illustration here, it goes from the top on cliff there all the way down to the spray park.

Thank you.

Thank you. Councilmember Oxiger and then councilmember Harris.

Yes. Thank you, mayor. One of the things that I'm curious about is I believe it was $365,000 was the estimated spray park element in this. Almost all of the cities around us have spray parks.

Mhmm.

And when you say spray park to any of our people, our residents, that's what they're familiar with is the surrounding ones. And if you go online, the the the cost of those parks is anywhere from 1,500,000.0 to $2,000,000. What is it exactly that we're getting for the $360,000?

Okay. So this is kinda what you're seeing here, council member Asinger. So it's a and it's in the plans. I get the square footages if you want for it, but it's it's at the end of the play area. We have a a spray park. It's not a massive, like, wild wave spray park. Right? It's a smaller spray park for hot days when the kids are coming out on the beach. They can come through and and get you know, run through the water a little bit. So it's not a giant Wild Waves Park, but it's this is this is what's in the project right here.

And it allows us to also keep the from the designer's standpoint, it allows us also to keep a large enough dry area for the kids for the parents to be in as well as the wet. Right? So it's kind of a mix. It's a multiuse. It's not a full, you know, wild waves, if that's what you're asking, or one of the larger ones.

Well, none of the surrounding spray parks are massive wild waves spray parks.

Well, in Tacoma, I built a couple of them, like, in in Lasenas Park up on the hilltop. It was it was similar size to this along with some playground stuff around it. So there are smaller spray parks in in in smaller in smaller in other jurisdictions also.

Okay. And then, also, this goes hand in hand with Spray Park, but, also, do we have any cost estimates on what the maintenance of this is going to be?

We do. We we've done we've done some analysis on that. So so we're thinking it's gonna be around thirty to thirty five thousand a year to maintain to maintain the play equipment and the spray park.

And do we have any projection on how much revenue this is going to generate?

We're not charging, so it should not generate any the the actual infrastructure will not generate revenue. It's will it where revenue may come from is if you bring more people in, activate space, do they spend money downtown? Do they spend money at the quarter deck? Do they do other things as they come into town to use it? That's the that's the only revenue generation there would be. There could be some leasing of the space. We've talked about that in programming it, but we have no estimate of that yet.

K. Thank you.

Council member Harris.

Thank you. I have a couple of fairly mechanical questions. You provide a deductive alternatives for two of the items.

Mhmm.

But I honestly don't know which of these motions to which it would apply. Would it simply be, you know, to approve motion one just with two deductive alternatives? Or

So what staff's recommendation is from the agenda packet is to proceed with the full because it's within budget to proceed with the full without exercising the deductive alternates. If you wanted to exercise the deductive alternates, it would be, I believe, number two. Let me go back and double check

that. Oops.

So that would be right where it's highlighted under 8.5. If you wanted us to do a motion to to do to exercise one of the deductive alternates, that's the number it would come out of.

Thank you. A couple other real quick so the $3,530,000 a year, that's parks and rec money. Correct?

That's Correct. Would come out of parks and rec funds most most likely the maintenance of that with our maintenance crews.

Okay. And, let's see here. And, assuming it was deducted, just hypothetically, like, this is probably a fool's errand to ask, but what would not be there? In other words, what what would it do you have any, you know, sense of what it would not look like?

Yeah. Well, we in previous I I did not bring that slide in because it wasn't what we were recommending, and we could provide you with that slide, council member. But we shared we shared a slide Yeah. In our analysis earlier in the year that showed what it would look like without, and we when we went through all eight all four of the different versions with and without. So we've shared that in the past. I did not put that in this presentation.

You're a lovely human being. I'm just if you provide me with a deductive alternative, I wanna see what it would look like with the absence of the thing. Anyway, that's it for questions. Thank you, sir.

Councilmember Nutting.

You're on mute, sir. Hear you.

There you go. Can you hear me now?

Yes. We can.

Alright. Let me switch. I'm I'm working with one screen here. I got a couple questions and then a comment. So the first question is is in the bid, it says archaeological and historical salvage. A little confused by that. It's it's a very minute number, but still and you can answer the question offline. I'm fine with that with an email or a phone call. Second of all, the first the the picture that was shown was of soldier piles with a shoring wall. And I'm I'm not sure that we're doing that on this project, but I haven't seen a full set of plans

yet.

So, council member, I don't we should not we may be using some shoring yet. We haven't seen the means and methods yet from the contractor. But the real the reason why I showed the picture was to show the the close construction access with the earthwork close to the, buildings, not as an example of what construction we would be using. Okay.

Understood. Thank you very much for that explanation. Second the the final thing is is that we may not have, it's a question. Do we have numbers on the estimated development that may happen in the marina due to this project?

I do not have those numbers, councilmember. If what what the additional expansion would be in the future is we have not, to my knowledge, taken a look at what that growth would look like.

But we we have looked at have we looked at the fact that, the development of these stairs would spur development of the marina floor and the few small parcels that would still be left available?

I I personally believe they would. I don't know if we've studied that directly. We've looked at it more from the the historical documents I've read has been more about trying to connect along with the 2 23rd Corridor and the Cliff Avenue corridor and the stairs, connecting the downtown to the water to bring more people into the downtown and make make a a pedestrian traffic much easier and safer. So whether or not it would have an effect, I believe it would have an effect on the on the marina parcels as being more valuable depending upon what the use would be. But I don't know if we've actually studied that yet in any type of a case study, and and maybe the marina I'll ask no.

We have not.

We have not.

Alright. Well, you you answered my next couple questions about whether it would bring more people down to the marina and and service as a way to our downtown businesses, a safe a safe track to our downtown businesses from the marina because there is not one right now. So thank you very much for your comments.

Right. Any other questions? Councilmember Mahoney.

So this is directed to you, Mike, and the city manager. You've guys been to other cities, and and you've been familiar with capital projects like like this. And he spoke about the potential that it can bring to the marina floor. But I wanna see from your experience, what do you think about what would happen in our downtown area as we build this amenity? Do you think it gives incentive for future development in the downtown area?

Well, councilmember Mahoney, I I I don't wanna speak out of turn, but I think it's we're coming up on a strategic plan next year that we're gonna be working on. And when you look at the different things you do by trying to, invigorate, densify, and grow your downtown area, and I have experience with that, infrastructure projects like this are key to help bring developers in and when you increase density and bring peep draw people into your downtown. This is just one of many of the projects, you know, increase you know, making sure the beach park is here 50 from now, the connections on Cliff, making Cliff safe in February, taking a look at a downtown corridor in the future, revitalizing the downtown businesses and bringing people in higher maybe higher higher heights downtown. All of those types of things are where the future will come from. A public entity has the ability to do basically two things.

Right? One, put in public infrastructure to make the place a draw and to emphasize the beauty and and the accessibility of these assets. Right? And two is to increase density. That's the two things we can bring to the table. The rest is gonna be outside development. And I think that this is a project that leans us in that direction in the future, just like the Bridge Of Glass in Tacoma, Tolleson Plaza in Tacoma, the steps at the UW. There's multiple projects in the region where when you piece them together, you create a business friendly environment. You create a developer friendly environment that then brings in development. And so I think that it's one project that gets us along that route. And so yes.

Projects like these can be really powerful, and I think we've talked about that a lot before. But, again, we do as the direction of this council. And so vision and timing is really the council's prerogative. And so I I don't wanna put staff in a position of of weighing in on something that really is a council decision about the vision of this community.

Understood. Thank you.

Any other questions? Alright. I'm gonna move into the suggested motions. Deputy mayor Steinmetz.

I move to direct the administration to bring forward a budget amendment to the twenty twenty five, twenty thirty capital improvement plan and the 2025 capital budget to include the amended Marina Steps project as described herein and include such amendment in the next available budget amendment ordinance.

Do have a second?

Second. Second.

Second for council member Mahoney got that one. Alright. Any discussion? Councilmember Harris and then councilmember Oxiger.

As everyone knows, I am really opposed to the Marina Steps project for any number of reasons, not the least of which I think it should have been postponed until the strategic plan. But since it has seemed to be the majority's view to proceed, I will tell you I am really not loving the two deductive alternatives. And I would be willing to support the project en masse if those two were removed. I believe this is simply too complex, and I've always been in favor of connectivity to the marina floor. But if you keep the project as simple as possible, you provide an a canvas for doing something better.

I I'm very skeptical of the plaything and the spray park. I think it's trying to do too many things in too small a footprint. And if you keep it simple, somebody will come along with a better idea, perhaps more aligned to the original sense of commerce and retail and providing because the whole idea is to energize connectivity up to Marine View Drive. You you have to get you have to make the entire path up to up to Marine View Drive, including 2 23rd, have this kind of focus. And when I the more I look at it, the more I see it as being, like, tiny steps.

That's the connectivity. And the rest of it just being not doing the job that would drive people into the rest of the city. And by leaving it as simple as possible, we can address that after we do a strategic plan. So that's kinda where I'm at, and thank you.

So council member Harris, are you making a motion or you you're stating that

too, but I'm just you know, since that's second on the list, I just wanted to say that now so and that will basically, you know, affect how I vote on this laundry list of stuff. Alright. Thank you. Thank you. Councilmember Oxker.

Yes. Thank you, mayor. I would move to postpone the date certain of January 15 on this in order to give the new council an opportunity to weigh in. And if there's a second, I would explain why.

K. Do I have a second? Councilmember Harris for the second. Discussion. K.

This is a $8,500,000 obligation. We have to pay these bonds back. Right now, we are looking at a $2,000,000 deficit in the current budget, and we're also looking at budget deficits throughout or out to 2030. We do not have a strategic plan. We are in the process of trying to develop one.

This seems premature and that it's gonna be it's gonna fall on the backs of the new council to have to deal with these matters. This seems like an unreasonable hobbling of their efforts to be able to address these matters. And so I think it is it is, you know, contingent upon us that we need to give those give the new council an opportunity to address that. Thank you.

Alright. Counsel, as we move through these just wanna bring this up. I should have started with this. We have seven motions here and a lot of passionate opinions. As we move through this segment, I do wanna hold a little tightly to our time limits for our comments and two times each max with, without a vote. So, thank you for your presentation, and we'll keep moving forward. Council member Harris.

Yeah. Thank you. And, not to, but there was something that, mister Slevin, said that has struck me a long time and that, you do have to have this continuous vision over time. I mean, councils come and go and you disagree on stuff, but you have to have this overall kind of a thing. I support council member Oksicker's notion because I firmly believe that the next council would support some kind of really good connectivity.

I believe there is a there is a will to move this kind of project forward. I just think we can't come to an agreement on what that looks like. But if you can trust that the next council will carry forward that mission, I think that would be great to have something that has the input and just this continuity of agreement along the line rather than this just back and forth that we've had, this binary kind of a thing. It it really has been disturbing to me. A project this meaningful should be something where there is a baseline of agreement across governments.

I mean, what I've seen with good projects in other cities is that people disagree on the details. But overall, it's not like you just jam through this thing and then, oh my god. That's what's going on at the federal government right now, by the way. And I'm just I I do believe there is an agreement that can be had next year that will further a better version of this. Thank you. That's it.

Alright. Council member Mahoney?

We've gone through the process of planning the marina at least four times over the last forty years, and stall tactics like this shelved it. And what do we have today? We have nothing. You can say you can bring it to the next council, but I've been working for this for the last eight years and even council members before me were. We knew that we needed to get steps in the right direction to make bold statements, to build amenities that bring development here.

I have noted to check, but our town still looks like 1962 in a lot of places. We this is an act we can do. It involves it it it's something that brings it something for everybody. It's the safe way down. It's places for kids. It's a gathering point. I'm at the marina every day, multiple times sometimes. And I tell you, the diversity in the families and everybody we see on a hot day, a day like today, a rainy day, they're down there. And this is for all of them. It's for all the residents that are gonna come and enjoy it and the people that come to the community and spend their dollars here.

And for those that might be invest interested in investment and development, it's there. Delaying things is this is a tactic that just has got us nowhere. I'm not gonna support any kind of delay because it's not something we've been doing that just happened yesterday. We've been talking about this for years. It's been on the it's been on the dais multiple times, and it's the same arguments.

There's the efforts to delay and do what other councils have done in the past and shift it to the future and nothing gets done, or they break the cycle and do it. This is a great piece of community gap gathering point. This this is our town center, is the marina. And by doing this, we are making a change that will directly impact the city not only soon as it's done, but for years and decades to come. And I guarantee you, people will come.

I go to other places that have done it. I've been down to the Downtown Seattle area. I've been down to Tacoma where they're on the Ruston Way and so forth. And the way it brings the community and gives a healthy place for families and community members to be and the potential, and I've seen the other business and development go around it. That's what's gonna happen here. So there's no no way I'm gonna support any kind of delay.

Deputy mayor Simons?

Yeah. I wanna kinda speak a little bit about the delay, but about some of the arguments that are being made for it. The this project is paid for primarily out of bonds. The bonds are to be paid repaid through our capital revenue streams that cannot be spent on the general fund. It is the general fund that's looking at a deficit.

It is not the capital funds that will ultimately pay for this. So the chance of the Des Moines taxpayers being put on the hook for this, frankly, is either a tactic or a misunderstanding of how our budget works. And I'm gonna assume it's it's the first, not the second. So the idea also that if we don't spend these funds, we will essentially get arbitrage fees in the neighborhood of a couple $100,000. I haven't heard a firm estimate of it, but generally around there.

So it will cost us money not to commit these funds at this point, which would be a huge waste of, again, the funds that we have. And those arbitrage fees, I think, may come out of the general fund because it is the cost of borrowing the money that then we have to do without getting it properly committed in time. So it makes no fiscal sense not to proceed at this point. I understand people don't like the project up here, and we've been going through this process back and forth. You know?

But it's been worked since 2019 is the time that I remember it first kind of came up, and we did dots. What do we want it to look like? We've had several public presentations. We've had community engagement on all of this. We really have done a lot to put this out there and to get public comment and public input on this project.

The vast majority of people that I talk to are in support of this, and a lot of people that I've talked to recently think it's just a great idea to have somewhere where they can take the kids. And this project does two things. It creates the connectivity because you can go up the steps or up the zigzags, but on the side of the zigzags, there's a place for the kids. Right now, our marina is not particularly family friendly and particularly this part of the marina where we want everybody to kinda see the jewel that we have. And I think that's important.

I think it needs to be a marina for everybody in Des Moines, and that's what this project truly is. And that's why I think we should go forward with this project at this time, and

I will support moving forward.

And I would oppose putting this over.

Council member Grace Matsui.

Thank you. I I thank you for your presentation. I very much like to meet the representatives from from the Bayshore Construction to come here and tell us a little bit about themselves and to hear from you about this project. I understand that this has been actually something that has divided not only the council, but the community because I feel that many, many people who I have spoken to have overwhelmingly said it's not very popular. And to them, it is an enormous expenditure for something that does not generate revenue or add direct dollars into our city budget.

There are indirect hopes, aspirations that there will be speculative ideas of more development and more density when we haven't increased any sort of zoning or density in the downtown in order to make that happen yet. So that might be something that a future council can take up. I do think that we are failing to listen to folks who are telling us that they disagree. The council is here to try and represent all residents and to balance how many folks agree, how many folks disagree, and to say which one is the most represented, which one is the most fiscally responsible. I don't think anyone at the dais thinks that we can just repurpose the money for another reason.

We know how capital budgets work here. That's not the issue that's at hand. The issue at hand, I've spoken to at this amendment, is whether or not this decision should be made on October 23 when we might have three or two or more new council members next year and if folks who are at the very, very end, six weeks of their term should be making this decision. I don't believe that's reasonable, and I think that it should be forwarded to the next council with the coincidences of the strategic plan. And some of the new studies and economic development activities that are going on could better inform a $12,000,000 project. And so I will be supporting this amendment, and I hope others will join us.

Supporting which amendment?

Thank you. Thank you for the correction.

Okay. I saw a couple other hands. Where okay. Here. Councilmember Ox, you're here for your second time.

Yes. The, you know, the the councilmember Harris made the point that, you know, we may be able to come up with some acceptable alternative with the new council on this. But I think the the critical point here is that we need to come up with money. And when you're in a situation as we are where revenue is a definite problem, The admonishment to measure twice, cut once is never more important than it is here. We've had the the comments that, you know, we have not done we have not done the return on investment type studies.

We don't know what this could do, and we also do not have a strategic plan at this point. I've characterized this before, and I think it's still apropos is we're putting in the landscaping before we build the building. Part of it, we've got to find some way to to use the marina to be an economic a a better economic development driver. And we just have not done the we've not put in the due diligence as far as figuring out whether this project will actually produce revenue, whether in and of itself it is sufficient to drive what we would like to see in development of the Marina District. So I think I think we're just not there yet.

We don't have all of the information that we need to make a sound decision. Thank you.

Right. I'm checking for council member Nutting. Okay. Alright. I'll weigh in.

First, to ask to how many people like it or don't, you you I think that you will hear people in favor of whatever you think if you're the one talking to them. But we did hear some pretty impassioned public comment several weeks ago, including a nine year old from the community, and there was an outpouring of support on social media, the ever accurate temperature reader of the community. Right? But it but there was an outpouring of people that said yes on the playground because of her testimony. About it being an economic driver, all across the country, placemaking we've said this before across the country.

Placemaking is the the way that people create an economic driver in their communities over and over again. If you Google the word, every talking head in economic development across the country will say, this is what you do. Can you ever measure for exactly what it's going to do? No. But they all say to do it.

Landscaping versus building, I'm not I think we are not landscaping or doing something for the marina here. We are doing something for the entire city. So are we putting landscaping for the building? This is landscaping for the entire city. This is a decoration calling card sign, huge flower basket, whatever you wanna call it. It says, come play here. Come enjoy yourself here. So it's not we're not doing this for the marina. We're doing this for the entire city. And then in regard to end of term decisions, we all sign up to make decisions for four years.

We get elected to make decisions for four years. And I don't think that it would be appropriate for all council members who are ending their term to just quit making decisions. And this is not a one time decision. This is the very end tip of dozens of decisions. And to flip now would be to say irresponsibly, for me anyway, that I didn't know what I was doing all the time, that I didn't do my homework all the other times when I voted a certain way.

So absolutely not. I'm not going to flip my decision tonight. This it would be irresponsible to have gone out to the bid and have these this company, all of these companies spend the time, everybody spend their time. It would be irresponsible to say at the very end, no. I guess not. So as far as an end of term decision, this is the responsible thing to do. It's just a culmination of eight years of conversation for me. Alright. With that in mind, I think that we've set our peace on that. So I am going to call the vote.

The the motion was to put this off until January. Right? Is that what you said? Or next or January 15. And there was a second in discussion. All in favor, raise your right hand. Council member Ochsicker, council member Harris, council member Grace Matsui, all opposed, raise your hand. Council member Nutting, council member Mahoney, deputy mayor Steinmetz, and myself, motion passes four to three. Fails. Excuse me. Thank you. Motion fails. Four to three. Okay. So now we are back to motion one that has been read and seconded, and we are still on the discussion for that. I will open. Councilmember Harris.

I'm this is just gonna apply to all seven things to save time. I really agree with council member Oksager about see, here's the deal. The first time the first presentation was this clipper thing in 2017, and I can think of at least seven different versions of this thing. It changes every year. There's been no continuity.

Here's my problem. I bent over backwards here. I really you know, to compromise on this. And there has been absolutely zero compromise on anything since I took this seat. Or, actually, it used to be over there.

There's never any compromise on anything. Along the way, there should have been a path to get to something that all seven of us agree on. I know there is, but we never compromise. We always present this stuff as a binary, like you're trying to delay, which which is essentially accusing me of the or anybody who votes against it of somehow being disingenuous and untruthful. I just told you what I would vote for, and it's like, no.

It's all too late. I'm just like the next counsel. What I look forward to is a milieu where people say, hey. I'm willing to do this. I'm willing to do that. And it's like, oh, great. And it's accepted as being truthful, and that's how you get the things that people can all agree on. Right now, it's not a question of yes or no. It's a question of the absence of compromise. And it's been that way now for almost six years.

It's just the that is the thing that is corrosive to government is the inability to simply flex a little bit. And that's what you know, you really have to believe that whatever this project is, you have to have a lot of, like you know, it's arrogant to say that just it's my way or the highway, and you're gonna thank me in ten years. There's something about that that just I don't know. It's just it's not great. You should always find a way to find some kind of thing if you can. And that's it for all seven.

Thank you. Any other discussion or comment? Okay. So we're still on motion number one. Discussion is ending. I'm going to call the vote. All in favor of motion number one is red. Raise your right hand. Council member Nutting, council member Mahoney, deputy mayor Stimitz, and myself, all opposed. Council member Oksicker, council member Harris, and council member Grace Matsui. Motion number one passes four to three. Motion number two. Deputy mayor Stimitz.

I move to approve the public works contract with Bayshore Construction, the contractor, for the Marina Steps project in the amount of $8,537,713.64 and authorize a project construction contingency in the amount of $1,375,000, and further authorize the city manager to sign said contracts substantially in the form as submitted.

Do I have a second? I'm gonna give Sorry. Council member Nutting as a second discussion. Alright. We'll go to the vote then. All in favor, raise your right hand. Council member Nutting, council member Mahoney, deputy mayor Steinmetz, and myself, all opposed. Council member Okser, council member Harris, and council member Grace Matsui. Motion number two passes four to three. Motion number three, deputy mayor Steinmetz.

I move to approve the consultant services contract with SOMAS Incorporated to provide construction administration and inspection services for the Marina Steps project in the amount of $924,000 and further authorize the city manager to sign said consultant services contract substantially in the form as submitted. Second.

Second goes to council member Mahoney. Any discussion? Alright. All in favor, raise your right hand. Council member Nutting. Count was that you, council member? Council member Nutting, council member Mahoney, deputy mayor Steinmetz, and myself, all opposed. Council member Oksicker, council member Harris, and council member Grace Monsui. Motion number three passes four to three. Motion number four, deputy mayor Steinmetz.

I move to approve the twenty twenty four twenty twenty five on call general civil engineering services track assignment 2025DashO1 with KPFF Incorporated to provide engineer of record services for the Marina Steps project in the in an amount in the amount not to exceed $426,787 and authorize the city manager to sign said contract substantially in the form submitted.

Do I have a second? Council member Nudding for the second. Any discussion? All in favor, raise your right hand. Council member Nutting, council member Mahoney, deputy mayor Steinmetz, and myself, all opposed. Council member Oksicker, council member Harris, and council member Grace Matsui. Motion number four passes four to three. Motion number five, please. Count deputy mayor Steinmetz.

I move to authorize the acceptance of the twenty twenty three dash twenty twenty five Washington State Department of Commerce direct appropriation in the amount of $970,000, and further authorize the city manager or her designee to sign the state funding agreement, when they are available.

Second. Council member Mahoney for the second. Discussion. Right. All in favor, raise your right hand. Council member Nutting, council member Mahoney, deputy mayor Stimitz, and myself, all opposed. Council member Oksicker, council member Harris, and council member Grace Montzui Montzui opposed. Motion, number five passes four to three. Motion number six, count, deputy mayor Steinmetz.

I move to approve the acceptance of the twenty twenty five twenty twenty seven Washington State Department of Commerce direct appropriation in the amount of $999,100 and further authorize the city manager or her designee to sign, the state funding agreement when they are available.

Do I have a second? Second. Pardon? You wanna give it okay. I'll give it to council member Nutting for the second on that one. Discussion. Alright. All in favor, raise your right hand. Council member Nutting, council member Mahoney, deputy mayor Steinmetz, and myself, all opposed. Council member Oscar, council member Harrison, council member Grace Matsui. Motion number six passes four to three. Motion number seven, deputy mayor Steinmetz.

I move to authorize the acceptance of the storm water ecology grant in the amount of $560,407 and further authorize the city manager or her designee to sign the state funding agreement, when they are available.

Do I have a second? Second. Second goes to council member Mahoney. Any discussion? All in favor, raise your right hand. Council member Netting, council member Mahoney, deputy mayor Steinmetz, and myself, all opposed. Council member Oksicker, council member Harris, and council member Grace Matsui. Motion number seven passes four to three. Alright. Thank you very much. Gentlemen, thank you for being here. Appreciate it. Thank you for the presentation. Thank you. If alright. That's it. Okay. Enjoy your weekend. I'll give I'll give us this I'll give us a second while we clear the room. Well, take a moment.

Check under your seats. There are three Halloween prizes under under the guest seats tonight. Really? Yeah. I know.

And two are from the front row. What they

I don't know if there I can't remember if there there might be one in the front row. If you're the first person to find the one in the front row. Think there's contact. There two in the front row? Two in the front row. Should I give you hints? Getting warmer. Getting okay. Well, we'll try it again. Yeah. That's No. That's weird. Okay.

Oh, they're under the seat. I didn't

Yeah. There we go. Monster Pete. Mhmm. Alright. We can check those out later.

Yeah.

It's a little bit of entertainment here.

We all didn't.

Yeah. Okay. Next up, we have utility a discussion on utility franchise agreements. The purpose of this item is for the council to consider the renegotiation of some of the city's water and sewer franchise agreements, and the presentation tonight will be Tyler Beekley. Thank you for coming forward, Tyler.

Great. You, Thank mayor. Good evening, counsel. Tyler Beekley, surface water and environmental engineering manager. As noted, we're, discussing water and sewer franchise agreements tonight.

But before we dive in, I just wanted to share a brief update as it relates to my position and franchise agreements in general. We're moving into 2026 and evolving my role to become a liaison to our utility franchise agreements for contract management, customer service as kind of a one stop shop. So in the past and what we are doing currently is it's kinda distributed across the board through different departments. We're gonna work to sort of increase service and consolidate that into my position. So that's hence why I'm here starting the presentation.

So jumping in. There we go. So just background on this item. We have 10 franchise agreements, over 10 franchise agreements, for use of our right of way. That includes garbage service, water, sewer, cable, fiber, and also PSC gas and power.

Franchise terms are the in these agreements are generally in the range of ten to twenty years. Longer terms are are generally disfavored based on continual changes in the law, technologies, or just standard practice practices that change over time. I'm gonna need your click of help. So specifically zooming in to water and sewer franchise agreements, we have five throughout the city. These agreements generally govern maintenance and planning in the right of way in the city for these districts as well as outlining project collaboration for capital improvement projects, whether it's triggered by the city or triggered by the utility.

There's mechanisms for partnership, collaboration, joint projects within these, agreements. They also talk about relocating utilities or abandoning procedures as well as, the legal issues of insurance, identification requirements, and then it outlines also the tax and the financial, sort of obligations of the agreements as well. So before us today, there are potential for renegotiating three of the contracts with Southwest Suburban Sewer District, Highland Waters District, and Midway Sewer District, all that have expiring contracts in June 2026. Now they potentially expire because there is a automatic extension if we do not trigger a renegotiation this December. That would be a five year until twenty twenty thirty one of an automatic extension.

So net there's an opportunity this December to send notice to open these and renegotiate a new contract or a new agreement. So benefits of opening up, especially at at my level, is we can evaluate with our franchise partners of what's working, what's not working in these agreements, what potential changes can we make. We've heard from some utility partners the way we con the way we calculate our right of way permit fees could be modified as they're, one, get into proprietary information of costs and can just be simplified. So that's one avenue we could go with opening these agreements. We can also address new technologies, address legal issues, and incorporate newly developed practices.

It also just gives us opportunity to look at uniformity between all the different agreements. And next slide. And then financial considerations.

I'm gonna take over here from here. Pass it over to Tim.

Thank you.

Thanks, Tyler.

Good evening, council. Tim George, city attorney. I'm gonna take over from Tyler here. The reason we're part of the reason we're talking about this is council tax tasked the city staff with finding additional revenue opportunities. And this is one of the items that we presented that council asked us to come back with additional information on.

So a tax on a utility can be a significant source of revenue for municipalities. Our current franchise agreements with all five of our water sewer utilities waive our ability to impose a utility tax. And instead, they have a 6% franchise payment, which was negotiated with all five utilities. We initially instituted that 6% with three of the utilities the three utilities at question here in 2016. At the time, that was kind of a no novel concept because we weren't legally sure that we could impose a utility tax.

So we were able to negotiate that in good faith with the utilities. And that number was a number that was locked in in 2016. It's been in effect for ten years. And what I'll show you in a second here is it's starting to get outpaced by some of our surrounding jurisdictions. Alright.

So, these are the utility tax rates that are in the municipal codes for some of our surrounding jurisdictions and some of our comparable jurisdictions in size. And so you can see we're down there at the bottom at 6%. Some of these cities do have franchise agreements with individual utilities, which would which have franchise payments, which might make those lower because if you can negotiate, you wouldn't be subject to the utility tax. These are the taxes that are on the books. Currently, the city of Des Moines is at zero because we have no utilities that are subject to the utility tax.

All all five of them are are franchise payments. So you can see the city is is low there. So the the question tonight is, does the council want to authorize city staff to alert these, three utility districts that we would like to renegotiate? If the council does that, we would recommend reinstating the ad hoc franchise committee. This is a this is a long process.

It's not something that would be done overnight. It would probably take us, you know, six months or or maybe more of meetings with with the utilities, and we discuss everything that Tyler talked about. This isn't just about the money. This is about are there options that that would actually benefit the utilities? Are there things that they don't like about our franchise agreements that we could offer them?

But revenue is a problem here, and, this is an opportunity, for the city to raise some revenue. And so what we would, we would involve the franchise committee in these negotiations. And then, of course, any agreement would ultimately need to be approved by the city council, and it would need to be approved by the utility board. So it would it would ultimately need to be agreement of both parties. And then the question of utility tax.

That's kind of a last resort. If we are unable to agree on a franchise payment, the city could just we could leave that silent. We could remove any sort of franchise payment from a franchise agreement. We could we could agree on what we can agree on. And at the end of the day, the city council can impose a utility tax at whatever rate the city council would like as long as we don't waive that ability through a franchise agreement.

So we're we're talking about renegotiating, including the franchise payment as an option. If that's not something that works, the council could always consider utility tax, but that would be at the end of the road. And so at this point, here is the suggested motion for tonight.

I think I wanna make a quick comment before you all dive into discussion. You know, I think anytime we talk about revenue, sometimes it goes without saying, so I wanna make sure we are saying it. We absolutely recognize this isn't like dollars that don't exist right now in the community. I mean, these are dollars that our residents and businesses will pay. So that's why I think that really encouraging the council to be involved in providing, you know, a sounding board and some guidance and feedback during negotiation really helps us make sure we're keeping this connected to our residents and the impact on them.

Because as you all know, we don't have very many tools that the state law allows us for revenue. This is one. But at the same time, you know, we recognize this impacts the very people we use these dollars to serve. So I just wanna make sure we had a comment on that because we absolutely recognize it.

Okay. Ready for questions? Alright. Questions. Councilmember Harris.

Well, first of all, to Tyler, you're gonna be the liaison for all the franchisees, like Recology and Including Recology. And we've already started shifting some of those responsibilities. So does that move you up, like, one level on the pay thing?

It it does, but we're not gonna talk about that today at Hopkins.

No. I'm pointing to stick to the questions here for the agenda. That was a legit question. Well, that's personal.

I asked, we know how many residents would be affected in each of the or can you get that for each of the three franchisees in We

don't we don't have that number today. We don't have that number today, but that's something that we could get, especially during if we were meeting with the utilities.

Have we waived any right to impose a utility tax for any of these franchises?

For all of them, we have. Yes. Through the existing franchise agreements.

Okay. So I guess what I'm saying is so so we do not have the option. Are you saying we don't have the option to impose a utility tax?

At the moment, we do not. What we're asking to to do is renegotiate the three expiring franchise agreements. And if we don't include the waiver in those agreements, then we could impose a utility tax.

At the end of the term?

Or

The end of the term. Yes. But that the end of the turn is term is June 2026. So we're about seven months away.

Is there any is there anything preventing us from implementing our own discount system somehow? That is since we don't charge, we don't collect the rates, we wouldn't be able to provide a discount, but that's something we can certainly negotiate with the franchises franchisees

to include and and they already offer that, but we can get more information, and we could certainly talk to them about what we would like to see in a discount program. That's something we could certainly discuss with them.

Okay. And last but not least, I just I guess my you know, I'm fine with having an ad hoc committee and everything, but should we not consider some kind of are there any ground rules to this? Like, I I just every time we, we go through this surprisingly often, and, the question of equity comes up. And are we would we be negotiating for three separate agreements, or is the goal to have one equivalent agreement across all three that would eventually, you know, coalesce into all five?

Well, each district has their own board. So, you know, it would depend on whether or not the boards agreed. Previously in 2016, all three of them shared an attorney. And so those three have very, very similar agreements. So I would imagine it it just depends. It depends on who's on the board. It depends on a lot of a lot.

I'm just I'm just asking if that's the goal is to Uniformity is is, I think, is the goal, and it would be helpful especially for Tyler.

Yeah. Yeah. So, I mean, I equity, uniformity in these agreements would make sense. So it it again, that depends on the board.

That that's my only thing is basically having three separate deals because of whatever people

Yeah.

Disagree on. And it just it seems like the fair thing is to have uniform rules for everybody, but that's just okay. Thank you.

Any other questions at this juncture? Okay. I I do have a question. I can't remember. When is there a deadline for the formation of let's say this passes tonight. Is there a deadline for the formation of the ad hoc committee?

No. It just

We would if this were to pass, we would notify the three the the three districts that we would like to renegotiate the agreements. We have until June 2026 to negotiate. Even if we're not done by then, the franchises would just go to month to month. So we could wait until January would which would be my recommendation to form the committee.

And the committee would be made up of council members or a combination of staff and council?

The committee would ultimately, it's up to the council, but the recommendation would be it would be three council members.

K. So probably the decision on that would be next council, January. Yeah. K. So, alright. I think that's all my questions for now. Moving to the motion. Do I have a motion? Council member Mahoney.

I move to direct the city manager to notify eligible utility providers of the city's intent to renegotiate existing franchise agreements.

I have a second. I'm gonna give that to deputy mayor Simon. Saw his hand first. Thank you. Council member Nutting. Alright. Open for discussion. Deputy mayor Simon and then council member Nutting or excuse me. Council member Harris.

You know, I I think this is exactly what we asked for. I think this is one of the ways that we can explore new revenue options. I do think that there needs to be some understanding that these are regressive taxes that hurt the poorest the most. But I do think that it is worth a worthwhile endeavor to open these negotiations and at least try to find a way to come concurrent with our our neighboring cities. So I'm very much in favor of this.

K. Council member Harris?

You know, I'll vote for this if it's the council's will, but I would just say the better policy is to wait until '20 until the the agreements expire and establish a uniform utility tax, one set of rules, and not keep going back and forth. I understand why the system came up as it is, but ultimately for simplicity, you know, you just wanna have one set of rules that are simple and eventually bring all the special purpose districts into that. That is the long range most equitable thing, then we can establish our own discount systems and so forth. But whatever. Thank you.

For clarity, on the on the observation by council member Harris, is it possible to wait till they expire so that we can decide on a tax?

We're

I'm confused on that.

If we do nothing, the agreements will automatically extend till 2031.

And so that's when the that's when you would have the opportunity to establish tax

Well, theoretically negotiations. Yeah. Then the I mean, unless if we do nothing, we wait till 2031.

Okay.

If we pass this motion, we could theoretically impose a utility tax in 2026.

Mhmm.

If the council is not satisfied with the the negotiation process.

Okay. Understood. I just need some clarity after this demeaning, council member. Thank you. Council member Grace Matsui.

Thank you. I appreciate deputy mayor Simon's acknowledgment that these types of fees are regressive, and they hit folks who are on fixed incomes when a bill goes up, not in proportion to how much they make or how much their home is worth, but just a number that the city council would like to increase in revenue. I understand that we are very limited in the amount that we can raise when it comes to the property tax. We got a primer on that just earlier in the meeting about how inflation and expenses outpace how much we can raise in terms of the levy, which we are capped at. But we are looking for ways that also do not get passed straight on to a rate payer in a disproportionate manner and affecting those who really can't see a 100% of these franchise agreements or taxes just go directly to all of the utilities.

Not one of your utility bills, but all of your utility bills. So I will not support this because it is a regressive tax, and I think we should continue to work hard to find more progressive revenue sources. But I understand that the the need is there if we want to pay for additional city services. Thank you.

Okay. Just a moment. Council member Harris, I'm checking if anybody else has their first comment. No? Okay. Go ahead, council member Harris.

I just wanna say something you've never heard me say before, but I felt very sorry for Dave Kaplan when he was mayor. And I vividly remember the first notion of the utility tax, and, man, he got he took it really a lot of because the potential was for 16%, and people just well, they were just punishing about that. And the city should have sold it as being, no. You can set it for whatever rate you want, and you can keep it consistent and so forth. But because that upper limit was so stratospheric, it created this, you know, sense of, like, the city was going to just, you know, just put the screws to everyone when in fact having the central control is simple and could provide more equity.

The fact is I'm just I'm sympathetic. The entire utility tax system is regressive. But if you look at our general fund, we are becoming a fee for service model. All the cities are. We are rapidly reaching a point where utility taxes, however you label them, are going to be equivalent to property tax.

That ain't changing anytime soon. And somehow, we have to find a work. It's gone from, like, being 70% when I moved here to, like, one third, one third, one third if we're lucky. And we have to accept that reality. I don't know how to get there, but to me, having one agreement over which we control seems fair.

The question is, are we trustworthy? What destroyed the utility tax discussion, you know, twelve, thirteen years ago was the ongoing lack of trust that, miss Carey spoke about. I am I keep hoping that that situation has improved so that we can, affect the proper policies. Thank you.

Thank you, council member. Okay. Council member Oksager.

Thank you, mayor. I'm really torn on this from the standpoint that the the regressiveness of the taxes is just is a is a definite problem. At the same time, we're now being offered, unlike the last item, were some flexibility. The council the new council is going to have to try and come up with something. This is, like, not the optimum thing you wanna have to deal with, you know, having flexibility on, but it's one of the the it's the, you know, hand we've been dealt.

I think that I I would urge the next council take a a very, very conscious look at progressive taxes and how much they they harm the the least affluent in our community. But as far as, you know, we have to have some flexibility because the previous item has boxed us in.

K. Well, I have some comments then. I agree. I thank you for all your your comments. I do agree. It's regressive. It's painfully it's painful to look at our options moving forward. But tonight, if we do pass this motion, it's not a decision on an amount. It's permission to negotiate and come back. So the permission to negotiate includes no fee and no tax.

That's the option. But it does open the door for some of these others. If the voice is strong inside of the negotiation with our council members that are on this ad hoc committee. There doesn't have to be an increase. It just it it opens options.

It's part of our responsible responsibility to explore all options well, and that's what this does. The guidelines would come for the Ebola committee and for the process would come from the council. The formation of the ad hoc committee would be not an appointment by the mayor, but by voluntary council members willing to step up to the plate and by council vote on who that is. If we do in the negotiation, I I did appreciate council member Harris's comment about you don't have to go to the highest. You know, we have what we think that we could allow.

We we could just do this very small incremental incrementally if the members of the committee agree to. So I will be supporting moving this forward. I do I can't make a I'm not gonna make this part of the motion, but I do would recommend I'm not gonna be here, but that at least one council member who votes, if if a council member votes no on this, that at least one council member who voted no is on the ad hoc committee. Does that make sense? That somebody who didn't really appreciate this, that that voice is included in this ad hoc committee. That's my recommendation. The next council will I

would second that.

You would There's no motion. There's I didn't I didn't move it, but I could could I put that as part of the part of the motion?

It's not really a

It's not creation of the It's a voluntary deal, but that's my recommendation. I'm not gonna be here. So those are my comments. Do you have a comment, or are you gonna make a motion? I had a question first. Okay. So I'm done with my comments. Go ahead.

I'm trying to remember since the last ad hoc committee was, I think, 2016. But is is there a code language about how that committee is formed, or is it something that the next council decides?

There's not code language. It's just an ad hoc committee is a committee for a specific purpose, and so the council can just decide how how they how they want that to look.

Great. Thank you.

Alright. Council member Oksager.

So the question would be, the zaprofo, is the is the the, feeling of the of the membership here that we would that this council would appoint that committee, or is it something that will be laid over to the new council? New Thank you.

K. Any more comments or thoughts before we vote on the motion? Alright. Take you to a vote. All in favor, raise your right hand.

Council member Nutting, council member Oxgaard, council member Harris, council member Mahoney, deputy mayor Steinmetz, and myself, all opposed? Council member Grace Motzui opposed. So motion passes six one. Alright. Thank you, Tyler.

Next up is let's see what we have here. One two three. I am wondering if we should take a five minute break. I think I've we have a few a good hand healthy handful of items, so I'd like to take a five minute break. If you didn't find all of the prizes, look under the sheets.

There's only three. Okay. We're gonna reconvene. If you could find your seats, please. Thank you very much.

Council meeting is now reconvened. We're moving on to item number three, BNO tax model ordinance, an update and a first reading. The purpose of this item is for council to consider an update to the B and O tax code. And we have our assistant city attorney, Matt Hutchins, giving presentation tonight.

Thank you, mayor. Good evening, mayor, council, Matthew Hutchins, assistant city attorney with the staff presentation on draft ordinance 25 dash 100, an update to the city's, business and occupation tax model ordinance. So Washington cities have been authorized by the legislature to levy a tax on people doing business in the city as long as it's within parameters set by the legislature. In the early two thousands, there were, some complaints from the business community that, the cities were not at all uniform in their taxes, the rates, how they were applied, dates, such things. And they, basically, they said, that the cities not being uniform with each other or with the state, was unpredictable and was unfair to, the business community.

So in 2003, the legislature passed a law, essentially saying cities could continue to impose a b and o tax, but it kept the amount cities could impose. But it also required that cities wishing to impose a b and o tax adopt a model ordinance, that was promulgated by the Association of Washington Cities. The city of Des Moines did adopt the model ordinance, in 2005. And as the model ordinance has been updated over the years, city has made, the required changes. Why are we here tonight?

In this year's session, the legislature, this is the part that gets kind of technical and boring, but, the legislature changed the tax treatment of certain service activities, that businesses do. It affects both the state sales tax and the state b and o tax. Basically, there are some services that, some services that are direct consumer are considered retail sales tax and treated accordingly, and some that are not. There there was a change for some of the ones that had not been treated like retail sales. And so part of the bill changed definitions in the b and o structure, which caused AWC to update the model ordinance, and now we have to, make a change by January 1.

So here's a list, of the service categories that have been affected, information technology, website development, custom software development, certain security services, temporary staffing, advertising services. So as I said, previously, the state had decided these are to be treated as other services that are not retail sales, which put them at a lower B and O tax rate, and they were not subject to the sales tax. Legislature decided that now they are retail sales, and now they are in a higher tax classification for terms of b and o tax, and they are subject to sales tax. There was sort of a built in loophole where if you, under the old definitions, some of these services, if you did them electronically, they were what were called digital automated services. So those also had to be broken out, and they are now retail sales.

And the legislature provided a few new exclusions for, these kind of services when they are provided to health care providers. And so these changes need to be incorporated into the city code. So at the state level, because they've moved classification, they are subject to higher b and o taxes, but it doesn't actually have an effect at the city level. Every different classification of business, we tax them all the same. So they're classified differently, but they are going to be paying the same, b and o tax for us.

So the this our ordinance does not touch on the sales tax, but I just wanna touch on it a little bit. They're now subject to sales tax, which does include the city sales tax, but we don't actually have to do anything about that. Our sales tax, code is a lot easier, a lot simpler than the b and o tax. Basically, we just say anything that is taxable by the state is taxable for the city sales tax. And we also have the Department of Revenue collecting those tax and remitting it to the city.

And so they will be the ones chasing down anyone who is avoiding the tax. This hopefully will result in some increased sales tax on these newly taxed services. We don't know what that looks like right now. Hopefully, Jeff will have some information on that in the future. But this council should also be aware that, for city contracts in the future, this may result in increased cost for us because when we contract with those services before where we didn't have to pay sales tax on them, now we will be paying the 10.3% sales tax on them. So that concludes my presentation. There is a suggested motion. Are there any questions?

Councilmember Harris?

Are there any additional compliance costs for us? You say that DOR is gonna be chasing the money, but I always just have to ask paperwork.

There there should not be. No.

Thank you.

Nothing material anyway.

Checking up. To I have a question. So to clarify, this is basically about retaining what we already collect. Is that a good summary statement?

Yes. The effect of us not doing anything is we would not be able to impose b and o tax anyway.

So passing this just says we now we can retain what we're collecting. It's not like we're raising anything. Correct. Okay. And that was my only question. Alright. Any other questions? Alright. Do I have a motion? Deputy mayor's assignments.

I move to pass draft ordinance 25 dash 100 to a second reading on the next regular council meeting agenda.

Do I have a second? Second. Council member Mahoney got that one first. Any discussion? Alright. All in favor then, raise your right hand. It looks like it's unanimous passing it forward. Good. Thank you so much, Matt. The next item on the agenda is an MOU between the city of Des Moines and King County Metro. The purpose of this item is for the council to consider an MOU with King County with regard to studies related to our water taxi. I'll pass that to city manager, Catherine Caffrey.

Mayor and council, this is, as the mayor said, simply an MOU allowing the city to work with King County Metro as it relates to the work that you're going to consider. And the next item, that's in regard to the Department of Commerce grant that the council accepted last October. I'll go into more of that on the other item, but you can see sort of there on the slide the the main items in that grant, what it includes. So, basically, what this really is is allowing us to look at the feasibility both operationally, cost wise, ridership, economic impact. Does it help underserved communities?

Like, it sort of looks at the feasibility of a potential ferry service from a multitude of ways, but this allows us to work with King County on that. And the reason why is because I think the council has made clear both a strong desire for a ferry service here, but also a strong recognition that we do not have the funds for it. And so, really, King County Metro would most likely be the entity providing the service. This simply allows us to use their expertise and data and share back and forth with them. It does not change who's ultimately responsible for administering the grant nor does it require any funding between either entity.

So the goals of the commerce grant, as a refresher because it's been a while, is really community engagement, some of those analyses I just referenced, and then also looking at secondary transportation options, which means looking at the how does Ferry service stack up, again, when it comes to cost, operations, ridership to compared to other options like bus service and things like that. So that is also part of this. And so, really, yeah, this is just an MOU to allow us to share information. So I think I've highlighted a lot of that, and I'm happy to answer any questions.

Alright. Yep. You give me your Steinmetz.

Is there any piece of this study that is going to look at connecting a ferry with other forms of transportation in order to make it a more systemic approach to transportation?

Like, last mile type things?

To an extent, but even more so more than that. Just, you know, once you take the ferry, where do you go versus is there an existing route that could be tapped into? Is there something else that could be done? And how what does that look like and who would do that?

I think it'll really be looking at does a ferry service here for either commuters or tourism perspective make sense? And by sense, I mean financially using the metrics that sort of King County Metro uses when they evaluate expanding their routes. And as I said, they'll look at that compared to other modes of transportation. I don't think it's gonna I guess they will somewhat touch upon where are people going when they're using this because that'll be part of ridership, but I don't think that's really the focus. There is a real emphasis, though, on will underserved communities utilize this mode because that's a really important metric for King County Metro when they're looking at expanding.

Okay. Thank you.

Councilmember Harris.

I just wanna make sure this is intentional, and it may be a typo. But one of the slides says a study of secondary transportation options for an electric water tax tax, I assume, taxi service.

Oh. Yeah.

I just my understanding is the call council talked about, you know, I'm not thrilled about it, but the, you know, the fossil fuel thing. And I I just wanna make sure, is it is it gonna focus on electric, or is it gonna basically be, you know, any type of vessel, I guess?

Well, it's definitely a typo to say tax. You can definitely tell we're in budget season, so that is my bad. The grant and I talked about this in the agenda packet memo, but the grant was written in 2022 or 2023, and it contemplated only electric water taxi. Yeah. Since then, the next item you all will be considering is the agreement with Nelson Nygard for the actual transportation and economic analysis part.

They will be using a diesel vessel as the baseline, but they will be including some analysis on what costs look like for electric. The reason why is because King County Metro has indicated their target for going to an electric fleet is being pushed back, especially in the marine division, because they don't feel confidence that the existing technology is really there to meet commuting needs. And so we reached out to the Department of Commerce to say, you know, when this was written, it only contemplates an electric vessel. We're now gonna look at diesel and electric, and they agreed that that was fine.

Thank you.

Alright. Any other questions? Checking up on the screen. No? Oh, alright. Thank you. Questions. Questions only at this point. We'll have a motion in a moment. Okay. No other questions then. Do we have a motion? Deputy mayor Steinmetz for the motion.

I move to authorize the city manager to enter into a memorandum of understanding with King County Metro Transit department for studies related to a potential water taxi service between Des Moines and Seattle.

Do have a second? It looks like council member Nutting for the second.

Second.

Council member Harris.

Thank you. I'm actually going to support this because I am a 100% certain that any fair study will speak for itself. And, yeah, that's it. Thank you.

Council member Oxiger and then council member Grace Motzui.

Yes. I'd like to thank the city manager for bringing this forward. This is the type of due diligence that I think when we don't have any money, this is the type of thing we should be doing to make sure that we are very careful in what we do. So thank you for this, and and I will be supporting it.

Council member Grace Motzui.

Thank you. I appreciate the presentation. I wanna echo those comments. I do think that it's time that we've been considering and putting forward and funding the idea of taxi service here in Des Moines without a comprehensive third party economic impact analysis. And it's time to do that to make sure that the future goals and expenditures are aligned with a realistic expectation of whether it will serve communities that need more transportation office options or will be potentially based on a recreation model where people will be paying to come here.

And we need that information, the due diligence, the evidence in order to go forward on those plans. Thank you.

Thank you. Deputy mayor Simons?

Yeah. I'm supporting this, I I think this is exactly why we applied for this grant in the first place is to get that data, and it's an important piece of of the plan or the hope that we can bring a ferry service here. So thank you. I I think it's well worth supporting.

Right. Yes. I I agree. I'm I'm I think we need this kind of information, and so does the county because we have said often the only way that we're going to be able to afford to do this is with a partnership with King County Metro. And there's an definite appetite in the council whether it's a the both the standing council now and the future council.

You know, there's been conversations with all potential candidates moving into that position at the county. And even this just yesterday or this week, I think it was Monday, council member Muscata sent me a note. We did advance a request to ask Metro to evaluate what resources we can lend to the Triangle route. Can you send me more information? So in other words, they're they're whole keep keep pulling the conversation out. They keep it on the table because they're definitely interested, but they need this information as well. So I appreciate the appetite. I appreciate the interest, and and I think that this will help both of us. So alright. So any more discussion?

Alright. All in favor, raise your right hand. It looks like it's unanimous. Seven zero. Great. Alright. The net so the next item we have is a contract with Nelson Nygard related to the previous the previous item. The purpose of this item is for council to consider a contract and scope of work in regard to the economic analysis of the water taxi pilot program. And, again, city manager Caffrey.

Right. So this is sort of the the supplement. Right? So now that we've entered into the MOU, this is what we're gonna be doing with some of those funds. So this is a contract with Nelson Nygard in an amount not to exceed a $100,000 to complete the economic and transportation analysis components of this. And I'll talk a little more about what they're covering and what a separate contract will cover to sort of collectively do the whole grant requirement. Nelson Nygard is a nationally recognized transportation firm. They work on all sorts of projects like this, but their Seattle office actually does have a lot of experience specifically with ferry services. So that's really to our benefit. That's kind of a niche that you don't find everywhere.

So they are definitely familiar with sort of operationally how ferry services work as well as what some of the operational considerations are that you would need to take and think about when you're looking at a service like this. Also, King County Metro has worked with them before and was you know, we'd already selected Nelson Nygard kind of before we were figuring out this MOU with King County, and they were very pleased that it was this firm because they've had good experiences with them. So the key tasks that they will be doing is, of course, you know, they'll be getting up to speed on everything that's been done in the past, but they'll be doing a market analysis of travel patterns in Des Moines. So that might hit a little bit on what the deputy mayor asked me about a moment ago, but they're really gonna be focusing on people that use public transportation. What is their demand?

They will also be working with stakeholders. The grant, like I said, is very focused on underserved populations, and so they will be doing some real targeted outreach there. And I failed to mention this on the other item, but King County Metro has a much larger staff than ours. And so they have a whole division on community engagement, so they are contributing their kind of staff time and manpower to help us with this. So that's gonna be great.

And then they'll, of course, be evaluating the prior studies that were done, but they will really be doing their own new study with their own assumptions and data rather than simply relying on the old one, but they'll definitely be looking at that. They will also be performing what's called an alternatives analysis, which compares ferry service with other transit options. And so like I talked about a moment ago, they'll be looking at factors like what does it cost to operate it, what's the capital requirement, connectivity, And then they'll make some recommendations. We talked a little bit a moment ago. They'll also be looking at sort of the unique aspect of what does it mean to run a commuter ferry service versus what does it mean for tourism or day service.

To be transparent, King County Metro, as you can imagine, their goal is commuter service. So if something doesn't really accomplish their goals for that, that doesn't really align with kind of what their work is. I think it'll still provide valuable information should, you know, we wanna look at more of a tourism approach. And then as council member Harris was asking about, the baseline will be diesel powered vessels, but there will be a supplemental memo about electric vessels. So kind of looking at that.

Now we will be doing a separate agreement with Burke that is under $50,000. I think it's 20 something. So I'll just be executing that. But that's really for the specific economic development analysis, which means figuring out what is the local economy benefit to Des Moines for having a ferry service. And that's a different skill set than kind of transportation planners.

So we'll be using a firm called Burke who does, again, national economic analysis all across the country who'll be focusing on that. So our timeline should the council approve this tonight is to get started next month with the work done at the March, and then we will, of course, be presenting this to you all as the city council, and then, of course, King County Metro leadership will be presented it as well. I'm happy to answer any questions. Otherwise, the motion is on the screen.

Councilmember Oksager.

So just for clarification thank you. Just for clarification, The suggested motion references an economic analysis for the electric water taxi pilot program. Is that simply that you're repeating the title of the Department of Commerce and everything we've said is understood that it will include the diesel component.

That's correct. Thank you.

Councilmember Harris.

You know, this can be offline, but could we get a little background on Burke and just since they've done this kind of work before, like an example of one you know, some of their previous work product?

Sure.

Thank you.

I I do wanna just say I really appreciate the amenable nature of our city manager, but that is the point of the $50,000 cap is that there are some things that that the administration is just able to move forward, but this is then now an assignment. And that's fine. And and she is so great with working for all working for and with all of us, but I did want to just make a mention of that. Alright. Any other questions? Alright. Do I have a motion? Deputy mayor Steinmetz.

I move to approve the consulting services contract with Nelson Nygard in the amount not to exceed $100,000 for the implementation of a Washington Department of Commerce grant for economic analysis of the electric water taxi pilot program and authorize the city manager to sign the contract substantially in the form as attached.

Do I have a second? Second. A second. Council member Nutting gets the second. Any discussion?

Alright. Take oh, you you know what? I'm having trouble seeing your arm because there's well, it's all your arm and your sweater is all white. If you could raise your hand a little bit higher, that would be helpful for me to well, there's not very many more opportunities, Betty. Go ahead. Councilmember Oxker.

You're really gonna like my comment.

No. It's alright.

All I wanna say is, hallelujah. We're doing this right. Hallelujah.

Okay. Great. Alright. And I don't see council member Nudding. No question up there? Okay. Motion and discussion. Take it to a vote. All in favor, raise your right hand. And it's unanimous. Thank you so much. Alright. Moving to item number six, new agenda items for consideration. I do have a couple of things that I would like to bring forward. They're related to the budget, so it's timely.

Number one is to consider future salaries for the council to be include COLAs that is commensurate with the staff on a yearly basis. So it wouldn't be a salary commission. It wouldn't be a a different salary per se. It would just incrementally go up with a COLA year by year and commensurate to the staff. And this kind of thing would be phased in.

Meaning, let's say the ask is to bring it back on a on as an agenda item. But if it passes, it only passes to the newly elected officials at the the next election. And then so for example, if it something that is passed before January 1 this year, four council members would be eligible to get a COLA next year. And then you would have to wait till the next election for the other three council members to be able to receive the same benefit if you do this without a planning commission. Is the council interested in having that brought back as an agenda item?

Do I have three nods? Okay. Three nods. Alright. The second one is which we just talked about is to consider increasing the city manager signing threshold. Fifth so the last time that it was established was in 2007 at $50,000. That $50,000 in 2007 is equal to 78,000 today. So it might reduce consent items and increase productivity. The city manager, if this was brought back, could include a list of items that would have been affected by this decision for the council perusal. Is this something the council would like to bring back on a future agenda?

One two three yep. Alright. K. Okay. Thank you very much. Next step is council member reports, and we'll begin with council member Grace Matsui.

I always forget it starts with a pledge. Well, thank you. Thank you for being here. I appreciate it. I did wanna a couple of things that came to mind while we were conducting business today, and someone had mentioned something about pet licensing. I have just completed all the steps to license one of the dogs. And I did it online, and it was very simple, actually. And in fact, it said, hey. You don't have all the documentation that you need to license your pet in the city of Des Moines, but we'll give you thirty days to come back and upload it, and then we'll send you all of your information. And I was like, that that is so nice.

And then I had to go to the vet and say, please give me all this information. It took just a few minutes. So as a reminder to folks, pets should be licensed must be licensed here in the city. We have a new service provider who does that online. You get a cute little branded ID tag that goes with your pet.

And I I didn't realize this, but when you log in, you can actually alert other members or even the city that your pet is missing. So there's other functionality within that dashboard when you log in that really I think could be an asset to folks who are worried about our pets that need to be licensed here in Des Moines. So I encourage you to go to our website and look up the information about DocuPent and get your pet licensed. I felt like of any of us who have pets here, I hope that at this dais, all of us have gotten a license for our pets. I know there are a ton of events coming up, including I talked about drag bingo last time we were here.

We have the Halloween happening on Marine View Drive with associated businesses. We have the Halloween walk, trick or treat walk. I know other people will expand on those things. This is gonna be the first year in quite a while that I actually won't be here for Halloween. I'm very, very sad about it. So I hope that you all have a very safe Halloween, and watch out drivers, please, for all those young and old kids that will be out on Halloween night. Thank you.

Alright. Council member council member Netting has left a meeting to take for the record at 08:33. And so next up is council member Harris.

Thank you. In addition to the regional transit committee, Roy Howdy, it has been all airport all the time with the mayor, attended a University of Washington meeting with their UW, DEOHS. Boy, that's a long so many acronyms. You know, everything having to do with the airport, you just basically have to get used to all acronyms all the time. I met with senator Orwell, congressman Smith, and just all this stuff because we're the commissioner is getting ready for all its SAMP jazz.

And I just wanna comment that the the the challenge is just the reason, you know, we started STNI is just it's for me, I get cranky because it's like Groundhog Day. We literally go through the same process every four or five years or you know? And because it's always new people coming in, they confuse research and study with getting something done. And, ideally, what you want is you would want it's the difference between being on, like, a like, a a special purpose district commission and the manager who is the technical expert that is there for twenty five years. And the issue is that other than the port, the only continuity is in the city of CTEP.

And that's why they go from strength to strength. At the one of the listening I and so I hear people talk about things like second airport, which is tantamount to saying that you favor ivermectin over getting vaccinated. It's just you have I've I'm through being even pleasant about it. There are just these certain myths that have got to go away. I wanna note because, the mayor was there.

The city of SeaTac is, in the next couple of months, is going to, there's gonna be a transfer of ownership of 213 acres of North Sea Tac Park for zero. It'll be a $20,000,000 or whatever it is transaction, but it will come at zero cost. And I am happy to say that SDNI played a small part in that. And it really came down to years of advocacy to change one paragraph in the federal code. And the same land that they will take advantage of is the Des Moines Creek Business Park in Des Moines and Neera in Burien.

The only diff and it has nothing to do with the fact that the airport is in SeaTac or anything. It's just that they work the issue continuously for many years, and they just go from strength to strength on everything because they have had that continuity of interest in the topic. And it's 20,000,000 it could have been the same kind of thing here. Could have been the same kind of thing in Burien. We chose this.

And it's and so I it's a weird thing. I'm jealous, but I I have to I have to applaud them. They're doing a great public good, and I hope we are truly noticing that this is something that we could obtain here. Thank you.

Councilmember Oxker.

Yes. Thank you, mayor. Again, I'd wanna reiterate the, you know, the trick or treat path on the thirty first from 04:30 to 06:30PM in the Marina District. This is undoubtedly the biggest attendance event we have in the city. It's really fantastic to see both parents and kids out there, and it is always a bit of a tight situation, the fact that we have so much traffic coming through on Marine View Drive, but, and everybody goes out of their way to, you know, make sure that the the kids are able to cross safely, kids and families.

But, anyway, yeah, I if if anybody out there has not seen this, you've gotta come down and see it. It is just crazy. And it's it's great to see the the ingenuity of some of these kids, you know, as far as their costumes. It's it's really something to behold. The other thing I wanted to address is this week, the there were speed bumps installed on 10th Avenue and on Beach Drive in Redondo, and they've had substantial effect in reducing traffic.

It's a bit early to give a complete assessment as to their effectiveness. We have discovered a few things that could use a little tweaking, but, you know, overall, the the reception is is completely positive, and I wanted to pass on the community's appreciation to both the public works and the police departments for their working on this matter and trying to solve. You know? I I'm coming up on my fiftieth year in Redondo, and it's been a problem for fifty years. So this is there's been more movement in the last few years on this than than on anything else.

So I I sincerely appreciate it, and hats off to both public works and the police department. Thank you.

Thank you. Councilmember Mahoney.

Thank you, mayor. First of all, I wanna recommend everybody to go to the YouTube site and type in Des Moines Marina camera. And you can, like me, put it on your TV or at your desk at work. I watch the construction going on and demolition, and I find it fascinating. And I knew who the regular dog walkers are as well. The second one, I wanna thank the city, the flower pots. You put the winter goods in. I wanna say thank you. I think it looks wonderful. A lot of people let those go by the but but we've noticed it adds that aesthetic beauty, and we really appreciate it.

And I wanna say thank you. Again, we'll be in front some of us will be in front of the theater giving out candy. Please come by. We always love the event as well. The police and fire typically show up. I'll be lobbying the chief to swing by, and we count which how many kids actually show up in fireman costumes and police costumes. Last year, I think the police won, but the previous three or four was the fireman. You know? Firefighters. Anyway, my my apologies on that.

And then I just wanted to mention, you'll hear more about this, and we'll put something out. But, November 11 will be Veterans Day event. There'll be some information posted. It's gonna be at Stephen J Underwood. It'll be about from 10:30 to 11:30 or so. And, looking forward to folks showing up for that, and hopefully, the weather supports it as well. Thank you.

Thank you. Deputy mayor Steinmetz.

Yeah. I mean, a lot of what I was gonna talk about has been covered. Just their community events. Go to the community calendar on the website. Take a look at the city manager's report, the mayor's minute that just have long calendars of things that are going on right now. There's a lot of stuff going on as we head into the holidays. I also wanna share that our dog is is now has dual citizenship here in Des Moines and in Granite Falls where my son lives because it's technically his dog. Although the dog spends a lot of time with us because he's a firefighter and an EMT and works two jobs as does his wife, and so they're not home a lot. So we get the dog. It's very it's always good to have a grand puppy.

And then compliments again on the flower pots. It really, really perks things up, and and it looks great. Thank you very much.

I specifically asked for those. Mike was resistant, so I really appreciate those comments. Awesome.

It's a good thing, Mike. But budget. Yeah. But but lots of events coming up. Please pay attention to them. Come on out. The trick or treat path is wonderful, and I'll be there in front of the theater and at the council table, you know, handing out candy, and we'll be counting the kids in fire and counting the kids as police. We'll let we'll let you know, chief. Thanks. Happy Halloween.

Well, yeah, happy Halloween. I I a lot of the things I was gonna say have already been said, but I'm telling you, I love this community and the way they reach we all reach out to each other. And I've been involved in the last couple weeks in so many different ways that that our community reaches out and supports itself, galas that are raising money for raising funds for domestic violence intervention, young people through young life, outreach to the youth of our community, a resource fair that was organized by Tanya up in the Safeway parking lot. People came out from all over the place, all the different resources available to support people in our community. I participated in this thing called girls on the run for third to fifth graders up at Des Moines Elementary.

They do it for in the fall and then also in the spring. And it's not just about getting these young ladies out to run. It's they teach them about self control and self evaluation and self care and relationship and working through things. It's it's fantastic. When I look at the different kinds of things that reach into the the people of this community, I'm so encouraged.

And even from not just officially from these nonprofits, but there's a woman in the community, oh, Frances Vander Yacht, and she does this little sips and chicks thing and goes to restaurants around town and just invites women to come and sit and chitchat because community members need each other. I just love when I see all of us reaching out to each other, supporting each other, whether it's officially as a nonprofit or just as people on the community. I appreciate living here, being here, serving here so much. Happy Halloween. So the this concludes our meeting for this evening.

The next meeting date will be 11/06/2025, a city council study session. Please remember to pick up after yourself on your way out. If you don't, I'll pick up all the bags. But Yeah. Member Grace Munsoe, do we have a motion?

Yeah. I move we adjourn.

Got a second? Second. All in favor? I six zero.