City Council - Regular Meeting

Good evening. I'd like to call the Gig Harbor City Council meeting of Monday, July 27th, 2026 to order. Tiffany, will you do the roll call, please?

Council Member Ahman.

Here.

Council Member Eckberg.

Here.

Council Member Martin.

Here.

Council Member Stone.

Here.

Council Member Tessicini. Present. Council Member Coronado is excused.

Thank you. If you'd all stand and follow me in the Pledge of Allegiance. 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. Before we begin the meeting tonight, I'd like to have a land acknowledgement. We want to recognize that we are gathered not only on the ancestral and traditional lands of the Sababish Band of the Puyallup Tribe of Indians, but also the site of one of their largest and longest standing historic villages of their people, the original inhabitants of the Gate Harbor area. Council, are there any changes to the agenda? I see none. There are no presentations tonight. I'd now like to ask for public comment on consent agenda items only. Is there anyone present that would like to speak on the consent agenda? Is there anyone online? Then We'll go to the consent agenda. Council, is there any action on the consent agenda?

Move to approve the consent agenda.

Seconded. Those in favor of accepting the consent agenda, please vote on your screens. Motion passes 6-0. There is no mayor tonight. I am the mayor pro tem, Lee Rodenberg. I'm chairing this meeting in place of the mayor who's unavailable tonight. We'll have the city administrator's report now. City Administrator Katrina Knudson.

Thank you, Mayor Pro Tem. Good evening, Council. Three quick things for you this evening. First of all, I wanted to say a large congratulations to Gig Harbor Little League, who took second place in state, I just found out today. So congratulations to them. Oh, we're clapping. We'll clap. Okay. Second of all, Council, you may be hearing from some of your constituents regarding an endeavor that's happening now regarding the creative districts. It's a state program for art within communities. Noting Council's... prioritization of economic vitality an ad hoc group of local residents the peninsula art league the waterfront alliance chamber of commerce visit gig harbor and the city are working together to see if we can put together an application of to become a creative district I know the council has talked about this before and it's on our previous strategic plan. At the last time that council considered this and we talked with the public, none of our local partners were willing to step up and take the work to put together an application for a creative district. However, it appears that that has changed. This looks at a creative economy and puts together a short, mid-term, and long-term plan with goals and expectations of how we can increase arts and culture in our community to ultimately increase our economic vitality, in particular in our downtown area. Again, this would create a state designation which could increase tourism, arts and culture, and sales and lodging tax. So I wanted to give you a quick heads up. You'll probably be hearing from several people if you haven't already for meetings to talk about it. So I wanted to make sure that you had that knowledge before moving forward much further. And lastly, we have hired a temporary management analyst named Elizabeth, and one of her main tasks has been getting the Gig Harbor Citizens Academy off the ground. She has, with background help, looking at other jurisdictions who have civic academies. She's put together, I believe, a 12-week program that is looking to launch in January where residents will be able to sign up and learn everything there is to know about the city, get firsthand experience on what it's like to process a permit or what our jail cell looks like. how the council conducts its business what our finances are and what the different funds are and the intent of this is really to give our residents an opportunity to get an inside look at operations how we conduct our business and have more in-depth knowledge of the city So we expect those applications to go live in September of this year with reviewing applications and interviews, and then the first session will be in January. And Elizabeth will be putting a session for you all on your calendar very soon for, I believe, February. Wanted to give it to you way ahead of time, but we will be having a session with council with the Civic Academy. So you all can meet with those folks as well. So thought you might want to be, well, I'm very excited about it and hope that you are as well. And we'll continue to keep you apprised along the way. Thank you, Mayor Pro Tem.

Thank you very much, City Administrator. Our first item of business tonight is Resolution 1365, Adopting the City's Three-Year Strategic Plan for 2026 through 2029. The staff report will be given by City Administrator Katrina Knudson.

Thank you, Mayor Pro Tem. Good evening, Council, again. Tonight, we have the Resolution 1365 that we're hoping that you can approve regarding the strategic plan. We know that we have a current plan. Council has worked on our upcoming strategic plan for 2026 to 2029. This work started initially at your two retreats on January 9th and January 31st, where Council identified common focus areas, including strengthening economic vitality, expanding diverse and affordable housing opportunities, and increasing connections with our community. And throughout the spring, we've met with council and study sessions on March 12th. The council discussed economic vitality as a priority, reviewing goals and strategies. On March 26th, council discussed in depth the diverse and affordable housing priority, evaluating strategies and partnerships. And then on April 30th, council discussed reviewed the proposed goal statements and desired outcomes for the economic vitality and housing priority sections. There has been one typo that has been noted by a council member, and I appreciate that that occurred offline today. And our communications manager is out today, but we will be fixing that clerical error, and I really appreciate that. Looking at the strategic plan, you'll see it looks different than it did before. We think that it's more usable. It really states the city's desired areas. Looking at it a little bit differently this time, there are two foundational pillars, and the council talked about those things as foundational to our work, something that we will always work toward. And those two are foster a healthy city organization and ensure a sustainable future for public services and facilities. Those two things are just foundational to all the work that we do. The strategic priorities are three that council really talked about in all of their sessions where additional work is needed based on the trajectory of the city, where we needed to put our money where our mouth is really to make change in these areas. And those three are the economic vitality, housing diversity, and community connections. And so with those, I know that we sent the language out. We talked about it at study sessions. It is as proposed today. And we're hopeful that after today, we can have a brand new strategic plan that we can put out to staff in the community to let them know what we're working toward and what is important to the city to accomplish over the next three years. With this council, there have been many discussions with you about what the economic vitality, housing diversity, and community connections look like to each of you. And I want to let you know that the directors have heard you loud and clear, as well as administration and the budget that we are preparing. You will see that we are proposing investments into economic vitality, housing diversity, and community connections so that we can really break out in 2027 and really start making change in these areas that the council have identified as high priorities. And we're looking forward to working in partnership with you to achieve them. With that, I am available for any questions. I also have Director Baker and Langholm up here. The rest of us stand ready to answer questions as well.

Are there any clarifying questions from council? Council Member Eckberg?

I just had a brief comment. Really like the look of this. It's a great job of summarizing what we had discussed and the work that had been done. It's a really nice visualization of all the topics. So well done on that. And I think it's a great document that we continue to put forward. The old strategic plan kind of got tacked on the back of meeting agendas at the very end. And I don't know how much it got put into public facing positions. And this is a very good looking presentation that I hope can get in front of as many of the citizens as we can.

Thank you.

Council member Martin.

So taking on to council member at Brooks comments, I want to say thank you to lower America. I know she did a lot of work on this or communications director and hugely appreciate the look on this in the field. And then adding goals from our comprehensive plan, I thought was masterful. It really tied it in nicely. So thank you. And I'm in full support of it.

Are there any other comments from Council? Are there any comments from the public? Anybody online or in the audience? Please come forward, state your name and your city of residence.

I have a radio voice. I don't have to repeat myself, I hope. This is great work and I am very appreciative of it. I've been working on this and my project for over four years and I've watched the city evolve and I'm just overwhelmed by this great work. So housing diversity hits my heart. Why? Because I'm sitting on a smaller lot in the city and I want to build a two unit townhouse for potentially some of my neighbors because I live and grew up in an 800 square foot house and I know how it is to live in that. And I don't certainly want to see great big homes stacked on top of each other in the Harbor, but I've lived here for 40 years and I am overwhelmed at how the city has worked with me in these discussions. Staff has been phenomenal and now we're really there. So the net of it is, is we need some code that backs all of this up. And I'm certainly reading commissioner Baker's report that says we're going to develop that code, but I want to make it real clear. An overwhelming amount of lots in this Harbor are one lots. I own one of them. I cannot build a two unit small 1600 square foot condominium duplex or otherwise on my lot. I have to have a quarter of an acre. And yet everything says I should be able to do that by today's standards, but I'm missing the boat by that much. And if you look at the lots, R1 lots, most of them are smaller than a quarter of an acre. So we got a challenge, we got an opportunity, and I need your help is what I'm saying. I'm hoping that the code will reflect that we reduce the lot size for townhouse or duplex units on R1 lots to 0.18 in the next code change. And I would also like to see that you limit the size of the homes that are built in that environment to no more than 1600 square feet. We're a fishing village. So let's build fishing village size homes that people that aren't multimillionaires can afford to live in. So that's what I'm looking for. I'm getting good news from staff and their efforts to accommodate my challenge. And I am very appreciative in the work that they've done. And I look forward to all of you attending the ribbon cutting. You guys can argue over who gets to cut the ribbon on my project when this all happens. And I will provide beverages. So I want to thank you for that work and hope that this can happen by September 1 because construction costs have gone up 22% since I started this project four years ago and I still can't build. So I need your help and I'm just overwhelmed at the progress that's been made. Thank you. Thank you very much, Mr. Chipman. Are there any other comments?

Council deliberation and action.

Move to approve Resolution 1365. Second it.

All right. Those in favor, vote electronically. If you can't, please vote verbally. I don't have the results here on mine. And what was the, okay, motion passes six to zero. Thank you. The next business item is the Public Works Contract Award for Public Works Construction, Restriping of Hunt and Scanty Intersection. This will be presented by Public Works Director, Jeff Langhout.

Thank you, Mayor Pro Tem. Good evening, Council. Yes, Jeff Langhelm, Public Works Director for the City, to talk about the request for public works contract for this project. There we go. So the existing layout of the lane configuration at the intersection of Hunt Street and Scanzee Avenue was designed by a private developer. This intersection design was part of mitigation for a project that they constructed right nearby. However, due to driver behavior and increase in traffic volumes, there have been several accidents at this intersection over the past few years since it's been redesigned. I'm going to share my screen and just kind of show you what the layout of the intersection looks like today. There we go. It's a little hard to see, but I think generally you remember what this intersection is. Scansy Avenue comes from the north and ends in a T intersection with Hunt Street. Hunt Street runs east-west. So it's a stop control for Scansy Avenue, and then it's free-flowing, no stop control for Hunt Street going both directions. And then we have, coming from Wallachia Drive westbound, there ends up being two lanes that go through. It's a little hard to see in the shading here. There's two lanes that go westbound at... Scansy Avenue, the right lane is a right turn only. And then the left lane is a through lane. And then traffic heading eastbound on Hunt from the county into the city, there's just a single lane through there. And then if you're turning left from Hunt Street and heading north onto Scansy, you have to stop all traffic behind you when you go through there. So everybody has to wait when you make a left turn. So that's the way it sits today. Because of the number of accidents and based on feedback from the public, staff has been watching very closely the accidents that have occurred here and received input from Administrator Knutson and some direction, and we reassessed with the support of a consultant what the restriping of this intersection could look like. Now, we recognize that on the six-year transportation improvement plan, we already have a project to do intersection improvements here. But I want to acknowledge that that intersection improvement plan is over a million dollars. It's quite expensive, and we don't have staff capacity right now and the funding to do that work. So as an interim goal, we have looked at restriping of the intersection to improve safety. So what we have done, and I will change, adjust this a little bit. Here we go. Let me know if I'm zoomed in a little too much. I'm pretty close. But what we have done is we have taken the lane widths that we have now and the pavement width between fog lines, and we've actually created a two-way left turn lane on the east side of Skansi. That's here. We've made the right lane. What was a right turn only? A right lane and a through lane. And so when you're on Skanzi Avenue getting ready to turn left, you don't have to pause and try and remember which lane is the through lane and which lane is the right turn only lane or hope that somebody who's in the right turn only lane actually does a right turn only. So that will take some decision out of it. It'll hopefully reduce driver error. It'll improve driver behavior. And then the other thing we did is on the eastbound Hunt Street traffic, we've created a dedicated left turn lane. So that brings vehicles that are waiting to turn left out of the through lane. And so it can reduce confusion there also. And so the project you have before you tonight is to restripe, and the contract you have for you tonight is to restripe this intersection as shown on the screen. I want to say there's more to it than just this. You might say, wow, that's an expensive project to put some striping down. It continues all the way to the city-county line, which is about one property left because there's more striping that continues on the left. And we have to merge it into the striping that exists at the intersection of Hunt and Wallachet. So we're going to go almost to the intersection of Hunt and Wallachet. And it requires a significant amount of traffic control by the contractor to get in and grind and remove the striping. Okay. So I understand this project is more expensive than we'd like it to be, but there's a lot of work that's going to happen, and it's going to all happen in a relatively short amount of time after this contract is hopefully approved. So... Again, we only received one responsive bid. You saw that in your agenda packet for $128,757. And the engineer's estimate for this project was $144,500. Because the one bid that we received was under the engineer's estimate, staff supports going ahead and awarding this contract. That's my report. I will say we do have enough funding in our street operating account to pay for this project. And so we're here to answer any questions you may have.

Thank you, director. Do we have any clarifying questions from council? Council members don't.

Thank you. Full disclosure, I guess, I live near this intersection, so very familiar with it. But I'm curious, thank you for providing the renderings. So I'm trying to compare that to what's in our agenda packet here. So there's going to be a center turn lane going both directions on Hunt. And then, sorry, I'm just trying to make sure I'm tracking kind of what is changing about this.

Absolutely. Let me bring that rendering back up. This is actually the plan sheet from the construction plans. It's a little busy, but that's where it comes from. So what's changing is... Along Hunt Street, east of Scansy, so to the right of Scansy, what is currently the center lane there now is the through lane, westbound. That is becoming a two-way left turn lane. And that two-way left turn lane is starting at Scansy and going almost to the intersection of Hunt and Wallachia. If you drive at the intersection of Hunt and Wallachia right now, as you approach Wallachia Drive along Hunt Street, it turns into a left turn lane there. That left turn lane is going to stay as it is, status quo. So it's going to be from that left turn lane to Skansi, it's going to be a two-way left turn lane.

It will connect.

It will connect.

Okay. When you said almost to the intersection, I was a little confused about that.

Yeah. But it's going to merge essentially into that left turn lane that's there today.

I see. Okay. And then, okay. Yeah. That makes sense. So then they'll still have a right turn lane. We'll remove the triangle strike bank that cuts you off.

Exactly.

You're trying to turn on the scans. Yep.

Okay. And that's, it's hard to see. It says remove existing painted Island here. So that's going to be removed as part of the project also.

And if this were to be passed by council, what is the anticipated timeline for when this restriping would occur based on the contract and bids?

Well, we haven't had our pre-construction meeting with the contractor yet, but I anticipate it's going to happen in August.

We're hoping to have it done before school goes back so that they're not having to deal with construction on their first week of school and losing kindergartners and things like that.

Council Member Allman?

Um, I just want to thank you for showing us these designs here. I think this is a intersection. Obviously, this is one of the concerned intersections, we get a lot of comments on in cake harbors. So and since we don't have the funding yet to do the full intersection change that we want to do, this is a really good step forward, I think will say a lot of people stress and hopefully lives as well. Thank you.

Mayor Mrakas, House member record quick clarifying question on the West side of this site Jeff we're on on hunt going westbound currently. Mayor Mrakas, That curb lane, you can make a right turn it goes past the driveway to the development and then merges, so you have two lanes past that and then it merges into one so is that. Mayor Mrakas, The current through lane is that all going to be Center turn lane at that section as well, extending that way westward.

Yeah, it's going to be, it's essentially, and you can barely see it on this match sheet section, match line here. It's going to become a two-way left turn lane just west of this left turn lane. And so it will then taper.

That would extend where the development is and then merge after that. Okay, that's what I thought. Thanks.

Yeah, the questions that you're asking are really germane to one of the reasons why I think we all know how important this is. It's not only going to impact and better the intersection, but also the Bella Sara community. They're going to have a turn lane to get out safely as well as the Skansi Point. They're going to have a turn lane so they're not having to bypass two lanes of oncoming traffic to turn out to go to Wallachet. It's going to make it more safe for those neighborhood commuters as well.

Thank you. I see no other questions from council. Is there any public comment on this project? Anyone in the audience or anybody online? I see none. Then we will move to council deliberation and comment and action.

I move to approve and authorize the following capital project for restriping Hunts-Gansey intersection for an amount not to exceed $128,757.50. Second.

Motion was made by Councilmember Stone and seconded by Councilmember Ekberg. Please vote on your screens or verbally if you cannot. Motion passes six to zero. Thank you, council. Now we'll move to staff reports. We will have quarterly finance and budget report by our finance director, Scott Larson.

Thank you, Deputy Mayor. Give me one moment while I get this up. Thank you, Deputy Mayor.

Thank you, Council.

Tonight in your packet is a written quarterly financial report, as well as I have a presentation for you, along with a number of reports prepared by directors that provide the Council an update on the work plans for the current budget. So overall, the city's financial picture is looking fairly strong. Starting with the general fund, revenue is about 53% of our expected budget. So we're running slightly ahead there. There are some caveats that I'll get to here in a moment. But overall, revenue is looking positive. Expenses are about 41% of the approved budget. Those are on a year-over-year basis are up a little bit, and I'll get into those details a little bit later, but they are generally tracking with the budget. And then sales tax is the middle. I keep that on here because that is the biggest source of revenue for the city, and that is at 49% of our expected budget there, and there's some strong seasonality as we went over last month. So our big months will come from July, August and September collection. So it would be expected that that's running a little bit below 50%. Set the stage here a little bit. Since we don't live in a vacuum, we are subject to the macroeconomic environment. A little bit of an update. A lot of this is coming from the state revenue forecast, but the state added about 6,800 jobs in June, which was above their forecast. Unemployment for Washington state is at about 5.2%. which is off our low from a couple years ago of 4-point-something percent. Seattle inflation is 4.5%. It's definitely running a little bit hotter than we were hoping for, primarily due to energy prices. And then just for context, 30-year mortgages are about 6.5%. It's about half a point above the five-year trend. And that's really impactful to our REIT collection, home sales, and kind of some cascading revenues that the city collects. So this is a similar chart to one I shared last month regarding sales tax. So this breaks out the industries that pay sales tax in the city. Two of the bars there, information and admin support, are new kind of sales tax categories that were mostly added in October of 2025 from a change in state law on sales tax. So I wanted to call those out because the growth – The growth that they're showing there is less growth and more new taxes that weren't previously collected. Food service, though, wholesale trade are all kind of bright spots. Retail trade is the real driver of our sales tax, though. It is up about 5% compared to the same six-month period before. a year ago and construction i had made an error in the last uh presentation i gave showing construction down i went back and recalculated and it's it ended up really being flat i had some issues with timing and it's been updated and hopefully won't be a problem going forward uh regional housing market Gig Harbor is a little slower than broader Pierce County. In Pierce County, closed sales are up about 14% year-to-date, whereas Gig Harbor is down about 14%. We are a much smaller market, so we are impacted by just kind of a... smaller volume of sales in Pierce County. In Gig Harbor, we've closed 146 sales as of June 30th versus 171 the same period last year. In addition, prices have softened about 2% in Gig Harbor compared to the county, which is up about 3%. Medium housing prices in Gig Harbor, though, remain strong at about $906,000 versus Pierce County, which is just a hair below $600,000. So we remain a fairly strong housing market. So this is moving back into general fund revenue, a little bit of a breakdown here. So we have a whole bunch of revenue categories. Most of them are running a little bit ahead of where we would expect to be about mid-year. However, a lot of those, if you kind of look at the details, are fairly small producers of revenue. The one you really want to look at look at is the one the second one from the bottom which is taxes that's 15 million out of our approximately 20 million dollars in revenue that and like i said that's we're running just a hair over 50 there so overall we're looking good for revenue the one uh spot that is running behind is interest earnings and that's due more to a change in the interest rate environment for uh cash that we're holding for future projects or future work that the interest we're receiving there has come down. And I'll get into that a little bit later. Sales tax. This is an updated chart from what you saw last month. June was above our forecast. And for the year, we're expecting to collect about an extra half a million dollars in sales tax over the prior year. There are a couple of important caveats that council asked about in June, though, or that I need to update the council from comments from June. So there is a Senate bill that added the taxes in October, like I mentioned before. But Senate Bill 6343, which is colloquially known as the millionaire's tax, will eliminate all the new taxes we started collecting in October. So. I'm really looking at this and I would strongly encourage council to look at this as one time money until that legislation gets settled. And we have a clear path of what that looks like. So for right now we have an extra half a million dollars, which is expected to end at the end of the next biennium. And so we'll be able to have some more conversations around that. And then there was a second question about personal hygiene products that there was a curiosity about what the impact to the city would be. There's not really good granular data to determine what portion of our sales tax is actually collected from that. But I did some research and some estimating and my best guess is that somewhere around $40,000 is what the city will lose due to the change in the rules around collecting sales tax on personal hygiene items. So it's not a huge impact to us overall. One area where revenue is up substantially compared to the last several years in the city is planning and building fees. We've got several new projects, fairly substantial projects that have moved through permitting and are off to construction. So we're up off our trend for the last several years. However, we're still on the comparable six-month period, still below 2022. But overall, we're looking a lot better than we have the last couple of years for planning and building. Moving on to general fund expenditures. Like I said, we're a little bit below 50% year to date on those. There are some changes, though, year over year. Police expenses are up when compared to the same period last year. That's primarily due to full staffing in that department, which was planned for. In addition, the Human Resources and Finance Department have had several positions that have been vacant. And as we've kind of discussed amongst the executive team how we want to shape the organization. We've brought in temporary folks to fill those positions rather than making permanent hires before we, you know, get in a place where we can't make an easy staffing decision. Another comment or another point I want to draw the council's attention to is I've split jail out in the expense or the expenses that you have in the report. This has historically been lumped with police incidents. their professional services budget however looking at it looking at a guidance from the state auditor this is a fairly substantial expense for the city um year to date we've spent about seventy eight thousand dollars on it and so i thought it was important to kind of bring this out for council to better understand the costs of of of those services that were providing the community and there's a little bit more detail in the the packet i provided But overall, general fund expenses are slightly below where we'd expect them to be for the 2026. Capital improvement program. So a lot of the money that the city brings in in revenue goes to maintain or improve the infrastructure. Parks development fund. We had a fairly substantial park project that was part of this biennium that has moved to completion recently. And then we've got the home port, which we're anticipating being before council for hopefully accepting a proposal soon. August 10th. So that will progress towards 100% towards the end of the year. 38th Street is ongoing and that impacts several of the funds here. So you'll see as that project kind of starts building the city, a lot of like stormwater, water and sewer will move closer to 100%. In addition, Lift Station 5, which was approved earlier this month, is about a $3 million project in the sewer capital construction fund, which is sitting at 10% on the chart you see there. And so that'll pick up substantially. So that represents about a third of that sewer capital construction budget. Utility enterprise funds, revenue in those funds is tracking a little bit above 50%. At this point in the year, I would have expected it to be a little bit low, but council adjusted rates at the end of 2025, and those rates were not built into the revenue estimates when the budget was originally put together. So that would explain why those appear to be outpacing mid-year. Expenses are... appear to be low. However, when you look at the seasonality of our utility expenses, we tend to backload most of our expenses in the third and fourth quarter. So I would expect those to come up to 100% by the end of the year or close to. So back to my comment earlier about investment interests, I wanted to provide council a little bit more detail about the funds we hold. We have two main places that we hold money for future projects. The local government investment pool, we have about $38 million sitting there. It's a money market account run by the state treasurer's office. And our most recent statement showed us receiving about 3.69% on that pot of money. And then in addition, we have a laddered bond portfolio that has various yields, anywhere from half a percent to a little north of 5%. And we have about $22 million sitting there. But the money market account is especially sensitive to changes in interest rates. And so that's where we've really seen the pullback in interest earnings. contextualizing everything that we're doing as part of the strategic plan and the goals that council has adopted. For asset preservation, we've received eight out of nine police vehicles, including one that was unplanned and had to be replaced due to a collision that happened earlier. As I mentioned earlier, housing and economic development, building revenue is running far ahead of where we were last year, which is driven by additional permitting activity, including several or at least one multifamily project that I'm aware of. core service delivery back to making sure that we have the right people in the right places. As I mentioned earlier, we've been managing staff departures with temporary staff while we work to fill those permanently. And then the community development as well as other ancillary departments have been working through the comprehensive plan. And you can see kind of where we're at in the implementation process of those projects. So my closing takeaways for the council. Overall, we're looking fairly good. We're doing quite a bit better than most of our neighbors who have revenue sources that are... much more variable than the City of Gig Harbors. Sales tax is looking strong, as I've mentioned. However, there is a likelihood that we'll lose some of the new sales tax that we're seeing now. And then capital and utility funds are on track, and we're expecting those to end the year where we hope them to be. So that is my report, Deputy Mayor. Thank you very much, Director Larson.

Questions, clarifying questions from Council? Also member expert.

Thank you, Director Larson, for that report. I appreciate it's well summarized and easy to digest. I appreciate your conservative outlook as well on the new tax revenue sources. While those are still up in the air to a lot of potential contests. So just a couple of clarifying questions on the utility funds, the operating funds, there were appear to be running a good operational profit. Do those profits get transferred to the capital funds for those utilities? Do they go back to the general fund or?

So utility rate revenue has to stay in the utility funds. So water revenue stays in water and sewer revenue stays in sewer. So it'll be either spent on operations or invested in capital. Okay.

Thanks. And then my other question. On the sales tax revenue, it's on page eight of the report. There was information I hadn't heard in that report that was really interesting to me where you talk about our per capita basis. And you mentioned that the city performs much better than other cities per capita wise in terms of our sales tax take. Is this just a function of us being small geographically and population-wise and now becoming a regional service center for a large population? Is this a testament to us being a good city that people want to come spend money in? Is there more we should take away from that piece? Because I hadn't seen that before and it was interesting to me.

Yeah, no, it's definitely an interesting statistic. So what Council Member Eckbert's referring to is that if you calculate the sales tax per capita, if you look at like the full State revenue and sales tax and then divide it by the number of folks in the state. Gig Harbor receives about three times that average. And we are number for cities over 5,000. We're, I think I said number eight or nine there. And so we're a very strong sales tax-performing city. The other advantage that we have is that we have a very diverse revenue base. A lot of cities that are in the top 10 have single industries that drive that. For instance, several car dealerships in Fife, which is closer to four times – four times per capita. Burlington, Washington, they have a big regional mall that drives a lot of sales tax, but malls are cyclical. And so City Gig Harbor just has a very broad base of sales taxpayers, as well as we're a regional draw. We draw in, you know, people from a fairly good area to come and spend money here at Costco, at Whole Foods, at, you know, whatever the case may be. So... Thank you.

Council Member Martin.

Thank you, Director Larson. I was really impressed by your presentation. It's very helpful in understanding, especially all of us having to jump into the next biennial budget discussion. So this is good question for you. Are there any I know we have a few bonds and are there any loans? I think there was a utility loan from one utility. I can't remember if it was like sewer to water or water to something. And I believe the state requires, even though it's our own funds that we have to pay an interest on that loan. Are there any things that that you've seen that it looks like we should be could pay off earlier to help us save funding or are we we don't have a lot of debt from what I can tell.

Yeah, so we've got about $11 million in outstanding bonds at the moment, and that's a combination of both general obligation as well as water sewer bonds. We do have a call on a bond that opens up the end of October, and that just means that we have the right to... purchase the bond back from the bond holders at par value. So that's something that I've been analyzing because that bond, the coupon on that is 4% and we're earning a little less than 4% in our investments. So there could be an advantage there. However, you have to think about the other side of it. If we have to reissue, we're issuing to a 5% market. And so We're going to have to look at that closely as the time gets nearer. But I think we also have a public works trust fund loan. And I'd have to look to Director Langholm for what exactly it's for. And then we do have an interfund loan, I think, for parks. But I'm not 100%. I don't have everything memorized quite yet. So that's a pretty good picture, though, of what our debt looks like.

No, and you're just the person to help us through this. I appreciate it.

You're welcome. Following up on that, we did have an Interfund loan. Parks and Streets borrowed money from sewer to help pay for the new Public Works Operations Center. I don't recall the duration of that loan, though that was taken on in 2024. So, um, yeah, so that, that should still be there. Uh, we do have a public works board, uh, public works trust fund loan, uh, for lift station five. That's about to kick off the agreements in place, but we haven't started to, uh, withdraw money or request money from that.

Thank you. Council member stone.

Thank you, really appreciate this briefing and overview. It's really helpful to see it broken down and it's accessible. So thank you for making that available to us as council and to the public. I also really appreciate that you've included like market dynamics too, because there's only so many levers we as a city and as a municipality can pull. And I think it's important context Did I, I think I read correctly that the average or the median sale price for Pierce County is like 595,000, but in Gig Harbor, it's 900,000? Correct. 906,000 in Gig Harbor, 595,000 in Pierce County as of June. Correct.

Correct.

That is a striking number. I mean, you think about what it takes to afford a home that's nearly a million dollars, right? We're looking at close to 200,000 probably for a household to be able to afford that in their annual income. And a lot of our residents cannot afford that at this point. So grateful that we adopted our strategic plan to look forward to making homes more affordable and attainable for folks. Thank you.

Mayor Mrakas, Are there any comments other from the audience or online. Mayor Mrakas, Thank you very much, director arson is great presentation. Mayor Mrakas, easy to understand, thank you. Mayor Mrakas, Is there any public comment on non agenda items. Mayor Mrakas, Please come forward state your name and. Mayor Mrakas, Where you live. Mayor Mrakas, And you have three minutes and push the button for the microphone. Mayor Mrakas, Is it green.

Oh, there it goes, okay. Hi, my name is Sarah Jett Racer. I am here today representing myself but also a couple organizations. I am a prior first responder and emergency management professional who was taken out of the field by some chronic and eventually terminal conditions. Those conditions ended me in a wheelchair with best prognosis being a walker with a very short and uncomfortable life. I stand here. in front of you today by the grace of cannabis and psychedelics and tenacity alone and then that healing did not happen in a medicalized or regulated setting that healing happened in community supported use which i think really needs to protect be protected throughout the state of washington and so i was hoping to come tonight to ask you to consider joining 34 of washington state population that is now covered by personal use and community access protections for entheogens So I stand ready to answer any questions, to provide any background, language suggestions, and support, and just ask that you would consider putting forward a resolution to protect access to personal and community use of entheogens. Thank you.

Thank you. This forum is not conducive to a two-way conversation, but if you'd like to send that information to our H3 director, Shae Smiley, manager, she can inform all of us on what you're speaking of. Thank you very much for your talk. Are there any other comments? Are there any comments online? Any comments from council comments on activities and committees? I see none. Oh, Council Member Martin.

Thank you, Mayor Pro Tem. Myself, as well as Council Member Ekberg and Council Member Tessitini were able to attend a Master Builders Association tour of a couple of facilities in Pierce County last Friday. And while those facilities were impressive, the affordability was still half a million dollars as we were just speaking And they shared a lot of housing facts with us. They had a national economist that presented to us, and they also talked about Pierce County specifically. And since we were just talking about this, it states that 75% of Washingtonians cannot afford a median priced home. The state median price home is $601,016. and the statewide median income is just shy of $67,000. So the needed income to qualify on average to buy a house at the median price would be $175,678. and we're at over 900,000, I think is what I just heard. A family earning, just to put these things in perspective, as we look and tackle how we're gonna do workforce housing, let alone more affordable housing, a family earning $107,312 a year for a two person household with a $22,000 down payment can only afford a house up to $396,673. I haven't seen a lot of those out there, let alone in Gig Harbor or anywhere in the state of Washington. The other thing that was interesting, they had presented that $1,100, everything goes up by $1,100 for each week of permitting delays, not suggesting that it was always Pierce County or the jurisdiction that have permitting delays. It could be things that they were waiting for an engineer or they're waiting for other professionals to be able to help support the work that they need, but because there's limited professionals out there, that increases the cost. Then $203,976 is estimated total cost of regulation for a new home in Pierce County. And so I have asked our director, Eric Baker, to say, what does that look like for Gig Harbor? It seems like that was high to me. I hadn't heard that number before. But it was just a fascinating look as we continue to evolve our discussions on what is it that the city should and could do to help support some more housing that we need. Thank you.

City Council Chambers, Thank you very much, can I add this one piece.

City Council Chambers, It was a very informative tour and Julie shared a lot of the facts, I think another piece that was interesting to me, we heard from. City Council Chambers, Developers that we're moving forward with multiple projects on the ground in pierce county so that the numbers were very real and very current and. City Council Chambers, The dream into the time element and delays also any additional costs. that get spread over time. It's more financing costs, more what the developers called carry costs. So the longer the project takes, the more layers there are, the more cost it adds into the end cost of housing unit. So as we look at our processes, ways that we can condense the timeline at all saves meaningful money on the cost of the housing units at the end.

Thank you. Council Member Stone.

Thanks all. Just wanna, while we're on the topic of housing, just wanted to, on the record, say thank you to our city staff for the tremendous amount of work that's gone in, particularly just this year alone, to be able to move forward with our strategic plan, to be able to look at our development regulation updates, It's greatly appreciated. And also want to thank my council colleagues. We can't make these decisions alone. And it's really, really inspiring and empowering to be able to have a council that has a shared vision for our city and for our community. Many of us here are, on a weekly, if not daily basis, the need for affordability, for more housing options, for folks in our own community who want to stay here. And so just really want to echo my thanks to my council colleagues, to city staff, and for the public that's engaging in these conversations so that we can move some things forward.

Thank you. I see no other council comments. There is a list of upcoming meetings at the back of the agenda. And this kind of concludes our meeting, unless there's anything for the good of the order. And I will. I will. You got more time. Go ahead. Move to adjourn.

I second.

Those in favor.

Aye.

Aye. Meeting's adjourned.