Finance Committee - Regular Meeting

We now have our techno our recording is in progress. Our technology is sorted out. Welcome to the October 20 meeting of the Olympia City Council's finance committee. I'll call us to order at 04:05. On the roll call, we have all three members of the committee here, and we have an agenda in front of us. I'd welcome a motion.

Move to approve the agenda.

Alright. Any comments, questions, polls? No. We're good to go. All in favor, say aye. Aye. Alright. We have an agenda. That brings us to public comment. Do we have anybody signed up for public comment this evening?

We had no one signed up online for public comment this evening.

Alright. Thank you. Next is there are no minutes to approve right now. We'll catch them next month. So

I don't

of my

pack. Ah, just not on this agenda. Let me see if my two agendas are different. They certainly are. Monday, October 20. Okay, how about considering the September 15 meeting minutes? Move approval. Second. All in favor?

Aye. Aye.

And now that brings us to the moment we've all been waiting for. Our senior budget and finance manager, Joan Lutz, is going to give us a property tax snapshot.

Good evening, finance committee. For the record, my name is Joan Lutz, senior finance, budget manager. This presentation is gonna provide an overview of Washington State's property tax system business. You wanna hear me? Is that better?

This presentation will provide an overview of Washington State's property tax system and the implications to the city of Olympia. Okay. Property tax in Washington state is budget based, meaning that the amount collected is determined, during the annual budget process within the state limits. The county assessor values all the property within the county while the Department of Revenue handles the inner city and utility properties. And then taxes are calculated based on property values as of January 1 in the assessment year and collected in the following calendar year.

For example, 2025 assessments were just made, and they will be collected in 2026. K. The valuation work performed by the county assessor looks at all real property. This is mobile and structures and land. And then once they assess the value of that property, the tax levy rate is a math equation.

There's no no magic to it. It's simply math. So it's assessed value divided by a thousand multiplied by the, sorry, the levy amount divided by the assessed value of multiple or, multiplied by a thousand, and that becomes our tax levy rate. So some quick reminders. State law limits property tax growth to 1% of the or to the implicit price deflator, whichever is less.

We have had one instance where the IDP or IPD was below 1%, and we had to do an ordinance so that we could collect the full 1%. So there is still a way to to collect the full 1% as long as there is an economic need.

K.

So there are many entities involved in the property tax levies. This pie chart just discuss or shows, you know, in general because it does depend on where you live and what entities regulations your property falls under. This evening, we're just talking about the city of Olympia. We also have the bond levy. That is an amount that the citizens have voted to, build a fire station, and the amount collected is just the amount needed to cover the debt.

And then, we have the OMPD, which is a junior taxing district. It's not actually part of the city of Olympia. It's its own entity, and so it has its own taxing rules and properties. Okay. Property tax is based on a or is limit has limitations of 1% which creates an inverse relationship between the assessed value and the levy rate.

So as you can see from the example as the assessed valuation increases the levy rate decreases and vice versa. So if the valuation decreases, the levy rate will increase because it's strictly a math equation. Alright. And we haven't finalized the 2025, assessed value for 2026 collections. So this example, is what you see in your 2025 ordinance for the current year.

We did we do have the preliminary numbers there off to the, right, and you can see that there's an increase of about four med four med. I didn't do the math. I shouldn't try to make that up on my off the top of my head. But there is an increase in the assessed value, in the preliminary numbers, and, also, new construction came in a a bit higher than last year. And then just final slide is just showing you on different, this is based on twenty point five's rate, different valuations of, property and how that impacts the the homeowner or the property owner.

And we did go ahead and include both the excess levy rate for the fire department bond and OMPD because, they are within the same district. Any questions?

Can you help me understand the, the rationale behind the levy rate going down as the this is new to me.

It is really just a math equation. And since we can only increase 1%, the the amount of growth usually for an assessed value is more than that, and so the rate decreases. Yeah.

Yeah. I said it's because the dollar figure is fixed while the AV changes.

You're welcome.

So something I've I've been trying to make sure I had clear in my head is that with this 1% cap, both inflation or your price deflator or whatever you call it, and the the increase in assessed value, those both work against the the the total amount that we're gonna collect from the community can only increase 1% of the year 1% per year regardless of the increase in property values or the inflation rate around us.

Correct. That's the most that we can collect.

Yeah. K.

And we will be bringing the public hearing to you for the ad valorem, which sets the property tax levy rate. I think it's in November 3.

And then the the other question I was asked a couple times this week was about Olympia's share of the the total and we've we've got a a a chart here, but really it's the three the three items that come to the city. The city of Olympia directly, the fire bonds, and the Olympia Metropolitan Park District. So that's 24% ish. So something less than a quarter.

Yeah. Less than 25%.

Yeah. Yeah. Yeah. Thank you, Joan.

You're welcome. Alright.

Anything else on this snapshot? I appreciate you putting these together. It's really helpful. Yeah. Well, we're gonna move next to an update on the tax review team, and we'll just bring the whole team up this time. So we'll make some more have some more introductions. Alright.

Look at all those things.

Oh, with tax review team sign sign markers. Oh oh my goodness. So, Thomas, if you'd be so kind as to introduce the rest of the team, we'll rock and roll.

Alrighty. Welcome, finance committee. My name is Thomas Donnelly, the finance, manager. And we brought the whole team in. And if you go to the next slide, if you would be so kind, these are the team members. There's a photo right here. We've got Nathan Wilkinson right here to my direct right K. Brandy Andrews and Sierra Jorgensen. Nathan is the auditor. Brandy is the lead, and Sierra is the technical program assistant.

And we'd like to just say welcome. We're gonna go over compliance, tax review, and outreach and education. And next slide. And I just wanna take a moment, let you all, read a couple of sound bites. These are these this is a bunch of feedback that we've received from our customers so far, And I think it's good to put it into perspective of what an awesome job the team is doing.

Next slide, please. And right now, I'm just gonna touch on the program estimates and actuals. Originally, when we did program estimations back in April 2024, we had a four year forecast, and I'm just presenting the exact year one and year two just to give it some perspective right now. The program actuals, July through December, what we ended up on our revenue to program expenses, penciled out pretty close to our first estimates for the first year. And our second year right now is we're in year two, January through September. Through September, we're just at 1.1. So we're, the team is doing exceptionally well to

You can pause this if you're gonna get into it. But why are the actuals on the expenses so dramatically lower than the estimates.

That's a good point. Year one states a full year. And when we got the program approved even before gearing up, I would say by July, we started having true expenditures. So the July through December is trying to be reflective of only the latter part of the year, of which was onboarding the very first hire. That would be Sierra.

And then a couple months later, then we had Nathan coming on board. So we had very it was bringing the whole process into fruition. We currently do not have the auditor position filled. We have an unfilled auditor's position right now also. And we've we have budgeted for our online tax system and some other nuances, which would be the not just the online filing, but our printing outsourcing our printing systems.

So the expenditures are tracking light. Thank you. Oh, I'm sorry. Sorry about that. Okay. My apologies.

And

Brandy?

We're gonna do a tag team situation. So, everybody will be presenting a little bit of this presentation. So, the next two slides just lead you through some of the milestones of the program. As you, I'm sure, recall, we stood we got approval from city council in April 2024 to start the program. And, the second half as of the of 2024, like Thomas mentioned, we were conducting hiring efforts and training efforts.

And then the second half of twenty twenty four, we also took a look at our municipal code just to see if we needed to change anything to make things clearer and, just more explicit about what the the team's procedures would be. And so that was a pretty substantial effort that, got completed at the end of the year and came online January 2025. We also spent quite a bit of time in 2024 just thinking about what our procedures would be and drafting those. And, since Sierra was hired in July, we were able to tackle some of our first compliance efforts. And in a couple slides, you'll get a feel for the difference between, in our minds, we think about compliance and auditing separately.

So we'll talk about those separately. But the first compliance effort started in August and went through December.

Next slide.

And then coming into this year, we finalized what we call our desk manuals, which are basically just how we're going to do things, what our letters are going to look like, and things like that. And, we did our first tax reviews in January and through April. So Nathan started, in the fall last year, and we were able to start our first tax reviews then, in January to April. And then one of our major things this year has been thinking about how we're going to reinvest in the business community. Because one of the objectives of the tax review team was to provide education, to the businesses to help, them comply more easily, understand things better, make sure we're clear, and stuff like that.

So, there will be a slide about that, too. And then finally, in July through September of this year, we took a look at our some of our materials, like our frequently asked questions document, our some of our forms, and also our web pages to clean them up, make them clearer and prettier. And so that, took place this year. Next slide. Alright. I'm gonna turn it over to Sierra now. She's gonna talk to you about the compliance side of this.

Okay. Hi, everyone. I have a really quiet voice. So but I don't need to shout into this either. Yeah.

So I'm gonna talk a little bit about the compliance aspect of our program, which we define sort of as the work we can do with our own data. We look at the folks who are operating in Olympia with a license that needs to be renewed or perhaps they haven't gotten the license. We check each period, each tax period to make sure that we're getting the expected amount of tax returns based on what we're sending out the door. We also check for any kind of errors that might come in on individual tax returns since we are paper based, so sometimes there's calculation errors. We can get payments without the tax form, which we can't process, things like that.

We assess those situations, and then we will reach out to taxpayers or businesses to try to get them on board with the requirements in the OMC. We have a little graph there just showing some of the different projects that we've done and the response rate that we've gotten. We're constantly assessing our own work to make sure that we are getting the highest response possible, that we're reaching the most, you know, as many folks as possible in our efforts.

Click us.

So here's an example of one of our outreach efforts, a letter informing businesses who we expected them to file the 2025. Oh, sure. Wait. Hold on. Okay.

I have I have examples, redacted examples, if you wanted to see them up close and personal. Just so you can get a feel for the kind of information that we share with businesses to try to make things as clean and clear as possible. Again, the compliance part of our program doesn't necessarily involve us knowing what is on each tax return. So we can't say, you know, the this many dollars are missing. We provide them the information they need to file their own tax return with penalties and interests as as advised by the OMC.

As I mentioned earlier, we are constantly updating our letters and our outreach efforts. I get to speak with everybody who calls in or emails, and I get feedback on what is maybe confusing, what is helpful and not helpful, and then I will redraft my work to try to help folks understand what we're asking for. We also have a review process internally, so we check everything before it goes out the door to make sure that it's it's accurate. Next slide, please. The last thing I think that I'm speaking to is, just our work in the last year and a half and how it's grown.

I started in July, and, in those last few months of the year, I managed to send out 543 compliance notices, which generated a $143,000 in revenue. That's revenue that we would not have captured if we didn't reach out. I also answered a 143 emails and took a 187 calls, but who's counting? Uh-huh. So far this year, I've sent just over 1,500 compliance notices, which has generated almost $600,000 in revenue, answered many more emails and phone calls, just to field general questions that come in on all kinds of things, tax and license.

And I think that's it for me, and I'm gonna pass it to Nathan.

Yes. Yeah.

Thanks, Sierra. That's fantastic. That's so much work, so good on you.

Thank you.

For the folks that you were able to talk to or exchange emails with, did you notice any themes in, you know, in terms of, like, I don't wanna say the the reasoning for for why they like, did they not know? Did they forget? Did they like, did you notice any sort of trends that you picked up on?

I would say that a lot of times, it's just, you know, things are getting lost in the massive amount of work that businesses are doing day to day to operate. So, really, my approach and our approach as a team when when talking to folks is just being understanding that this is one piece of paper you're receiving for your business, one task, but you have so much else going on. I would say that's probably the biggest thing. You know, it's not necessarily, like, purposeful negligence or anything like that. It's just things getting mixed up.

Sometimes there's misunderstanding between the difference between state, you know, and city and what they have to do there. So just clarifying that they're different entities and and what that entails.

Thank you.

Yeah. Thanks.

Hey. How are doing? My name is Nathan Wilkinson. I'm the Citi's tax auditor. So what is tax review?

Basically, my role is to review the tax filings to to verify that it complies with our OMCs, help identify opportunities to make the process more efficient and effective both for ourselves and then for the taxpayers, and address any questions that the taxpayers might have with regards to the process. Next page. So the process itself, generally, we send out engagement letters, and I set up a an kickoff meeting. And then during the kickoff meeting, give them a review of the process. I start to understand their business, request specific documentation that I'll be looking at as part of the review.

I basically go through recalculations and compare what I came up with with what they submitted. And then if there's any differences, we'll talk through those differences just so I can understand why there might be a difference. And we could talk through those. You know, sometimes, they didn't provide me the right information. Other times, they forgot something or missed something.

So so we figured that out. We get an agreement on what the proper tax should be. The results of my tax review, either we accept the B and O taxes as filed by the tax preparer or we identify that there's a tax assessment that's due or a tax refund that's due. I have an exit meeting to kinda go over the tax review, and we talk about the results. And I get agreement on that to make sure everyone's on board with what we came up with.

And then we end the meeting, and I'll send out the tax report and conclusion letter. Really quick, if you look oops. Can can you back one more slide, Doug? Just on the right side, we we do have a category that kinda captures the different types of errors that that I've noticed during the tax reviews. The most common is, missing being overturns and then the the related penalties and interest that that are associated with those. Generally speaking, the taxpayer, if they miss something, they should refile and then add the penalties and interest. And oftentimes, they just miss it and then don't do anything about that. So so so so I'm there to to kind of point that out and say, hey. Wait. You missed something.

So just to look at activities, 2024, I joined in October, and I'll just hit the highlights here in October or for 2024. Basically, we're establishing the auto procedures and the programs and and doing risk assessment to understand what areas we need to be testing, while we're doing our risk reviews and such or our our tax reviews and such. After 2025, started our our tax reviews. So, so far to date, we've completed 21 tax reviews and have 20 in the pipeline. That's through the end of the third quarter.

The revenue that we've generated so far is about 500 and say or $475,000 in SACS assessments that we've that we've assessed and collected. So that's the results for 2025 through the third quarter. Any any questions about that process? Or

Thanks. Really glad that you're both on board and adding to this team. So if I just wanna check my understanding here that of that total revenue for these these first nine months, it looks like it's about half from Sierra just sending out sort of bulk. You might wanna review your filings. We haven't seen something. And about half from your doing a more direct engagement with a tax review. So does that sound about right?

Yeah. I think right now that's how it turns out. So I'm sure the numbers will vary, but currently, that's that's what it's turning out to be.

Well, I I really appreciate this, and I'm I am slightly curious how Thomas and Brandi came up with a number that was very close to what for both those first months last year and for the this year. How did you ballpark hit the button there. I just yeah. How do you how do you estimate what's out there in the universe to be collected?

Yeah. That's a that's a tough one. It was with luck. I did it with luck. It it I eyeballed it. Brandy and I met and then thought what's reasonable, then added a markup, an appropriate amount of what we think would would be gained one or 2% from the year before on top of what type of audit results might occur. Yeah. I was lucky.

I just I'm impressed that that you you told us last year this is about how much revenue we'll bring in in the first year, and then we are. So that that's that's pretty remarkable.

I'm gonna say I'm really proud of them. They do awesome work. They are really are doing they're knocking it out of the park. So, Sierra, then you guys can take a bow for the revenue. Yes.

And, really,

Brandi, I think

you'll course. Thank thank you. And I'll let you pivot on to the education and outreach side here.

So what is education? In our minds, we kind of look at it from two perspectives, the external education piece that we've kinda touched on a little bit and also internal. So one important, thing that we've done this year, we've taken a look at the economic development contract. We have an existing contract with Thurston County, EDC Center for Business Innovation. And we looked through all the materials and offerings.

We signed up for the program, and they they actually waived the fee for me, which was nice. So we listened to what they had on tap. And the next step is to collaborate a little bit with them, maybe to provide some more targeted business tax related education through that. So we're in the process of looking at that the second, the, I guess, fourth quarter of this year. We also are really proud of the fact that we provide real time, courteous, and knowledgeable help for anybody that calls in to the city with a tax question.

We man the phones every single day and take that as a priority. And we respond to all of the tax and license questions that come in to the city. And like I mentioned, this year, we also wanted to take a look at our web pages and our materials that we offer out there, see if we could make things clearer and prettier and better. And so the fourth quarter of this year, we're planning to roll those out, and you'll see some changes. And then, I guess, other side of things, the tax form that we have is very simple.

But tax laws underlying that form are extremely complex, especially when you get down to the nitty gritty of an individual business and how they're supposed to report on our form. And so we spend a lot of time every single week as a team to think about how we're applying our own OMCs and the WACs and the RCWs to individual tax situations. So we have a meeting every week, and we say, well, what does this mean? And how should we think about that? And it's usually the nice thing is it's in the context now of a real life situation because tax laws can be very abstract.

And when you're thinking about a specific situation, it's much easier. And we're also building out our internal knowledge repository, because we want, over time, to not make different decisions with different situations. We want to be consistent. Next slide. Alright.

So the title of this slide is which you can't see, we are positively impacting compliance. So when we first pitched this program to you, we showed you this slide. So this was back in November 2023. And this slide was really a red flag for the existing team, which was basically me and Thomas, that, things were going south a little bit. Basically, what we found when we were looking at our data back then is that unlike pre COVID when about nineteen, twenty nine percent of all the businesses were filing not filing.

Sorry. We had increased quite a bit up to, like, 44% of the businesses licensed weren't filing their taxes us. So, that prompted us to make the suggestion, and it finally culminated in the new program. Sorry. It took me a while to process. This is slide looks exactly like the last one. Oh, no. Sorry. Can you advance one slide? There you go.

I was right. So I've added a new column, and we've made really good progress. So in 2024, we've moved the needle already by about 3%. So unlike in 2023, when about 44% of the businesses licensed weren't filing, we're already down to about 41%. So that's a great leap forward in just a short amount of time.

Next slide. Okay. So can you build? Did you take the builds, or did they get lost? Go on. No? Okay. That's alright. I had built it to focus better, but that's fine.

It doesn't have.

No problem. Gotcha. Okay. So I'm sure you can focus where you need to, when you need to. We're gonna start in the upper left quadrant.

So basically, the last slide was all of the filers mashed together. We have quarterly filers, and we have annual filers. Those are the two main categories. So this slide just looks at things split out by the quarterly filers and the annual filers. And so the left couple of slides, the top one's quarterly, the bottom one's annual, and the of not slides the left left couple of graphs are all about those the non filers.

For the quarterly non filers, before the program there were about 16% of the quarterly filers who weren't filing their taxes. Now we're down to 12%. So that's through September this year. On the annual filer side, so that's the bottom left, we were about 50% before the program started. Now we're about 45%.

We're 45%. So that's a 5% improvement. And I also included the base. There's about eleven sixty quarterly filers, which we moved by 4%, and about 9,850 annual filers, which we moved by 5%. And on the right, these graphs show you those who are filing, and basically whether they filed on time or not.

So that's another important metric because people should file by the due date to avoid the penalty. So we want to encourage them to do that. So the quarterly filers before the program, about 44% of them were filing on time. We're up to 58%. And on the annual filer side, we were at 42% filing on time. Now we're up to 48%. So, great improvement.

Next slide.

Yep. So we're gonna shift a little bit and talk about the online filing solution. Do you have any questions about what I've covered here?

Yeah. It I don't know whether or not this fits within the story you're telling, but the increase in businesses, both councilmember Cooper and I noticed that, what, 4,300, whatever, a substantial increase in the number of business licenses. Do you know whether that was because many businesses just weren't in compliance and didn't have Olympia business license endorsement on their state license or that we actually have new biz business enterprises? Do you have any way of teasing that apart?

It could be it's it's probably both, and we I don't think we can tease that out. No.

That that's okay. I just it feels like we're growing and doing well. And I but I I don't wanna just take that number because some of those people could just be coming into compliance. Yeah. So thank you.

So when you're talking about education, I was remember I did it. See? I was remembering the conversations as we led up to creating the program around, trying to use revenue for funding our Olympia Strong plan. And so can you talk to us a little bit about how you're budgeting for the program next year and whether you're capturing the revenue to keep in your program budget? Is it gonna go in the economic development budget? Are we releasing it into the general fund? Because I think the council had a pretty specific desire Mhmm. And we haven't heard this update as part of this year's budget process. So

I'll I'll fill that one. Pretty much the original budget that we produced when the program started put, earmarked $50,000 toward education.

Okay. Within the program budget.

So from 550,000 budget, 50 was attributed to, a reinvestment education outreach. And what we were trying to demonstrate was we're starting to move the needle, but it's, it's not delicate. It's difficult to try to provide education and outreach while not violating we're providing tax, information and guidance while we're doing auditing. So we wanted a third party or some other type of process. So we've went through the, EDC, as Brandy had mentioned, and we're what we, planned on doing is, we feel that 25% of that website currently the current contract of 40,000 is, roughly 25% of it's got tax related information so that we would take, let's say, $10,000 of that $40,000 expenditure into the tax review team as a reinvestment.

And then we're wanting to expand it like and Brandy had mentioned. In that, it would be they're different programs. They have little mini grant funds. I think they're $350 roughly for this little, training. If we can get that expanded to provide people with more ability to learn how to do their QuickBooks or some kind of filing methodology. Did I sorta answer that?

Yes. You perfectly answered the part of my question that's relevant to you.

There's another piece that is we what we proposed was, any revenue growth rate would then have 10% of it added to the expenditure budget so that we could reinvest as part of the budget process.

Growing the program along with the rest. Okay. That makes sense. Okay. So then I guess the other part might be for the budget conversation later, or do we wanna do it now?

Well, one thing I I'm gonna lean on our finance director to correct all of the errors that I say in the statement. But b b and o tax comes to the general fund and can be used on any governmental purpose. So when the city manager had the study session with you, I believe it was last week, one of the proposals is to fund $200,000 that goes to Olympia Strong. So that is a way that you can take a look at this as well.

From from that increase, should counsel approve it in the upcoming meetings?

So beyond the tax increase, though? Like, if we're if we're generating half $1,000,000 over budget, it's going into the general fund to balance the city budget, or it's being parked over here for economic development like the council wanted.

Correct. So the commitment was to put 200,000 for, economic development. So to move it, in other words.

So 40% of the excess revenue over budget is going to economic development on all of it.

Well so from the should council increase the b and o tax rate, then the commitment by the city was to put $200,000

Thank you for that. Thomas is. I was getting confused, and I missed Tuesday night, that's helpful to me. So my question is just about the tax team tax review team revenue

Okay.

And the council's desire to have the revenue from that program go into Olympiastrong.

Right. And that's Thomas' answer. Spot on.

So the the $900,000 should be the budget for economic development? Yes. No.

I think we should defer to the city manager when he's here

about how I mean, Just using the I'm sorry. Just using the logic. I'm stating out loud, not saying. But the council said that we wanted to fund Thirst Olympiastrong with the excess revenue from this program. But what I'm hearing is this program is all in the budget balancing pot

right now. Yeah. Yeah. Yes. It is. And I yes.

Thank you. May may I just follow-up a little bit? So To your meeting. Well, just the my understanding is a little bit of tangling these two things together that when we were first considering the tax audit team, hoping to to both have a level playing field to do fair collection and to consider an increase that representative partially very strongly kept saying, and we should have a couple 100,000 a year out of the b and o revenue going in to fund small business aimed economic development efforts. That's that's what I I recall.

But I I think that the the issue of trying to attach, like, the full amount or this year's is that I suspect we're gonna have a big a a larger initial gain, and then it's gonna level off as more people are in compliance. So I I wouldn't plan on a million dollars a year indefinitely of of increased revenue over a a previous year's collection. So and and Joan's gonna set me straight.

No. You're correct on that. The money that they're collect collecting now is money that we've always been due and should have come back into the general fund. The reason for the increase, should you adopt the the BNO tax increase is that that's money we were never counting on. But we have always been counting on businesses paying their their BNO tax as prescribed by law. And so this is they're collecting the money that's always been due to us to the general fund. And so we have the part of the education baked into the the BNO tax cost, but we did not have any additional like, Parsley had always recommend she, you know, she kept saying it, but there was never, counsel never said, yes. We're we're gonna do this, this, this, because this is always money that we've been counting on.

Thank you. That that makes sense. I don't think that anyone else ever gave any other ideas. So let me just say that. And I think there was general agreement that this would be a good funding source for Olympia Strong to the future even though there was never a vote. And I get that it's gonna be, what what do you call it, declining revenue, right, over time. But to me, then I would at least wanna see whether we should be parking it and using it over time for economic development and funding Olympia Strong. But I don't think that we even had a conversation about whether it was part of the general fund balancing or not. So that's that's why I'm bringing it up because I wasn't sure.

And at the risk of belaboring it, I think that the the compliance effort is is part of making it more fair and includes business outreach, but that the additional b and o money going into economic development is is not specific just to the enforcement or or compliance effort nor is it just specific to the rate increase, but it was a strong priority we had that the two things, actually, we're gonna get next to having an online portal for doing Citi taxes and licenses, which is something that I think would be a great service to the thousands of businesses. And then we also talked about creating some sort of a specific funding of economic development efforts so that we could continue things like the tune up and scale up that we funded through community development block grant in the But we could keep investing in those efforts to make life better for these thousands of small businesses. So so I I I don't I'm not sure that that I would wanna make a promise that sort of revenue that we weren't collecting that comes through our compliance efforts is is the pot that funds economic development, but but that this this makes it more fair, and as more people are in compliance, we can we could even revisit the rates.

Right? But but so I I I think it's this is all one big project about business and occupation tax. And then separately, we have a strong interest in taking part of the business and occupation tax and making sure it's reinvested in small business facing economic development efforts. Yeah. And and and I think

so I'm not asking for the next part of that question because we're too far along in the budget balancing conversation. Right? Like, I know what that does. But I also think that we just made it really apparent that we used a million dollars of one time money to fund our general fund in an ongoing way because this money is not ongoing, and nobody knew that. So I I I don't I'm not asking for any change. And and I and I think going forward, that's great. But the council should think about we need to think about how to fund those plans that are unfunded. And this was the only money. Okay.

I have a follow-up on this and then a follow-up not on this. So I want to make sure that I'm understanding this conversation, because what I heard Joan say was I'm going to paraphrase here if we're expecting 100 businesses to pay tax and only 50 do, then the work that these folks are doing to track down the other 50 is not new money. It's money that's already we've already spent in the budget, because it's for 50 businesses that we were expecting to pay tax. So I just want to be clear that are we talking about that money should be used for economic development? Or are we talking about the additional if the rate increased?

I'm not talking about the tax increases. I'm talking about the one time money from catching up on tax review. That's all. That's all. And in hindsight, we didn't take action, so here we are. So thank you.

I have an unrelated follow-up that's to the outreach question. So if I have a new business license with the City of Olympia endorsement or a new endorsement, do I get any kind of initial outreach that says, Hey, welcome to doing business in Olympia. Here's where you go and what you do to pay your your B and O tax?

We don't have, like, a letter of welcome or anything like that. They get a tax form in the mail and the ability to pick up the phone.

That's To

be that's what we do now. But we actually we have thought about it would be nice to have something, because we do know about them. They come into our system when they get their City of Olympia endorsement.

Thank you. Mhmm.

Once at general government, we were think we were having initial meetings with all of our economic developers when I first started on council, and we talked about that. And, like, a like, George Sharp delivers a welcome packet to the front door was the person at the time.

Eddie, would you like to resume and talk to us about our favorite question we asked you on Tuesday night last week Yes. About on file online filing tools.

Yes. Yeah. And I thought it would be wise just to summarize where we've been. So I started with this the city of Olympia back in 2021, and the first almost the very first thing I did was take a look at this, so Thomas had already started evaluating this, and he said, take a look at this contract. It was for a company called Azovar, and they were proposing that we have an online tax filing solution.

It sort of I don't know if I should say that out out loud. It seemed to me like they were kind of like a collection agency approach. Didn't seem very good for us. And then in 2022, we looked at file local. You might have heard that term.

The I think the big three or four cities in the state, so Seattle, Bellevue, a couple of others like that. Back in twenty something, mid twenties, they decided to try to make an online filing solution. And of all of the hundreds of cities doing B and O taxes, they've only ever gotten like 13 or 14 cities on board. We evaluated it. And the main drawback that I saw was that it costs a lot.

And it's like a big cost, both money wise and time wise, because they are a small, strange entity trying to do this very specific thing, they push a lot of the beta testing down onto the cities after they make a change to their system. All the cities have to stop everything and beta test what they just did to make sure nothing broke. And so we spoke with a couple of cities who tried FileLocal and decided to bail, that it was it, like, sunk them mentally, emotionally, everything. So not to say too much bad, but we also in 2022, we talked a little bit internally with some of our, excuse me, our folks in CP and D who use SmartGov. And it's a great software.

And they thought, maybe we can use this for online B and O tax filing. And we took a really deep look at that. And the main drawback with that is it's really designed for permitting. And permits are one by one by one by one. So every single permit has to be approved manually. And that does not work for b and o, like, 12,000 b and o tax filings because we would sit there all day approving every single tax filing. There's nothing bulk batch about that. So that one didn't work. In 2023 and 2024, we reviewed what were called the BOLT system. And that one we're going to circle back to on the next slide.

At the end of that evaluation, we were very keen on it. We loved it. And we were asked to review a new solution by OpenGov. And so we halted bolts and turned our attention to OpenGov and really diligently vetted that one. And that piece of software was it was a company acquired by OpenGov to do online tax filings.

Their wheelhouse mostly was sales tax and property tax in the Midwest, but they were trying to move into this area. So we're like, yeah, we can work with you and develop something really good. And so we took very hard look at that and the thing that we struggled with the most is that we needed some specific customizations for the state of Washington, like how we do penalties, interest and things like that and our threshold. There's some nuances there. And when it came time to do the contract, they wouldn't put any of that in writing for us.

And it made me really nervous that we would get something shoehorned. Because sometimes software providers try to just give you what they have instead of really working with you, because they don't have the bandwidth themselves to customize their software. So that one, we decided wasn't going to work either. It would have just been very difficult. And they also wanted us to majorly change some of our internal process.

That's the history. It's been fun, really fun. They're really I mean, what you're looking at there, those are all the solutions in the universe for online B and O tax filings. So we reviewed everything. Next slide, please. So we'd like to circle back to and reengage with the Bolt system. We believe it's the best solution for our customers. And as a next step, we'd like to, we'll be working with IT. They've identified some infrastructure needs related to this piece of the software solution. And I do want to note that our budget already includes initial and ongoing costs for that.

So we we did have that in our budget, which we haven't spent because we haven't gotten a solution yet. So the money's there. We just have to reengage and get it going again. And I think that might be my last. Oh, sorry. No. One more slide. We presented this slide to you back when we first told you about Bolts. It's a great system. It's very clean and simple for the taxpayer.

It allows us to transition over time from paper to electronic filings. And it uses programs and vendors that we already have and use every day and love. And it allows us to internally, like, reconcile our tax monies coming through the door. It's, much more simplified than what we do now. And the city of Bremerton has been using it for almost five years.

It's very stable, and it's on a platform that has been working really well for them, and the businesses love it. The take up rate on that for them over the last five years, I think they're at 70% of all their businesses file online now. So it's really good. And then lastly, we have this slide of kind of what's coming up for us this year and next year. So we have potentially this major thing, raising our tax rates and changing our thresholds.

So we've planned for some time in October through December for outreach and notifying. We've got a two pronged approach. Economic development, Jenica and her team, they are doing their thing, and we'll we'll plan to do some letters and, also something on our website about that. Should it go through? And then we're going to implement our web page redesign.

And then I already mentioned we're going to talk to start reengaging them on Bolts. We're also going to pause here at the end of the year in December and look back at what we learned through all of our compliance efforts and audits, reviews this year, and see if we should do something different or better. And then we're planning all of next year to work for a successful b and o tax program change, should the city council vote that through? So and I think that really oh, that's my last slide. This you've seen this one. It's just a good place to land while we field any other questions.

What's your timeline to having the remaining positions filled?

Currently, that's on hold. We targeted during the budget process for a half a year, and I was asked to keep it open, unfilled for the full year. So we're okay with leaving that unfilled for a year.

But is that extra those positions that are in the draft, the budget for the for next year? Okay. Great. Thank you.

Thank you for this report. It's it's just really exciting over these couple of years to be, you know, sort of watching through the window of your your program getting built, and and I'm I'm just really grateful for the amazing progress you've made. And fingers crossed that the online portable work because, you know

Call me out.

There's the whole the cloud, computers, all this nowadays. Right? Come on. Thank you.

I know it's Alright.

Amazon Web Services.

Yeah. Yeah. We are going to pivot to an approval of the recommended twenty twenty six utility rates, general facility charges, impact fees, and special revenues including Inspire Olympia, lodging tax, parking and business improvement area, and housing homeless response program budgets, and we are really fortunate to be joined in the room with the staff lead from each one of those areas, and Joan Lutz is gonna lead us through this. Are you? Well He's not the You're my staff contact.

Well, okay. Joan Alright.

Thank you, Joan. Late.

So here's your team, And, they have put this presentation together. I haven't even seen it. So Go.

It's a great intro. We're doing well. We're doing well tonight.

For for the record, I'll share I shared this presentation with her before.

Oh, he did. He did. Well,

got my glasses this time. I think a year ago, didn't have these, so I kinda referred to them. Still getting used to them. So, so, yeah, for, for the record, I'm Gary Franks. I'm the interim water resources director and currently utility advisory committee liaison.

To the right of me is our drinking water director, Mike Vesey, and to the right of him is our interim waste utility director Ron Jones. Give a quick quick little timeline update of kind of where we are in the budget process. We On September 4, we presented the 2026 operating budget, general facility charges known as GFCs, and then the capital facilities budget to the Utility Advisory Committee. And then on October 2, the Utility Advisory Committee voted unanimously to approve the 2026 operating budget, GFCs, capital facilities budget. There is an approval letter that'll be included in the November 3 public hearing on utility budgets when we when we do that.

So that'll be coming. So, not too far off of that. Yeah. And then next slide. So really, we decided to do make this a little, simple, and compare to previous years. So we combined what we're calling the wet utility sort of into one presentation. And so just kind of give a brief overview of all three utilities, so drinking water, wastewater, and storm and surface water. Those three utilities make up about 75 full time employees, 40 of those are in water resources, and then 35 in drinking water. I do have, an attachment here that gets really kind of in the more detailed summary. You can just hand out.

Oh, I might need one for myself just in case you have a question of some kind. That's just a summary sheet for you as we go through this presentation. If you have any questions, you know, feel free to ask. You do the next slide, please. So utility budget drivers for the wet utilities, the salaries and benefits increases, that's most of that is the HRCC work, but there's some other things on top of that.

And I should say actually, I should preface this before, but as you know, the the budget approach so our city manager directed us to have a hold the line budget and so all four utilities we did a fair amount of budget scrubbing to deal with the uncontrollable increases and really try to keep rates as low as possible that's what we brought when we went through the process with the utility advisory committee as well. So the three big budget drivers for those three utilities, salaries and benefits, that's the work. Most of that is from the HRCC work and the salary survey that we did to be and remain competitive to retain top notch employees in the Petersburg Sound, right? So that's something. And then on top of that, particularly with the drinking water utility, the Department of Health requires that any employee that responds on an on call basis must have a Water Distribution Manager one certification.

And so that was something that was brought through the bargaining agreement through the latest ASME contract negotiations. So that impacted drinking water more than the other two utilities. Then the other two things, it's been a trend really for all four utilities, but specifically to the wet utilities are indirect costs. So liability insurance and property insurance, particularly for the 2026 operating budget, seeing increase in property insurance. That's increased substantially both in drinking water and in wastewater.

And then the third is that a small budget reduction and transfers from the operating budget to capital the capital budget. So that is for mainly for drinking water to try to have a balanced budget to propose a balanced budget. We've had to make some reductions there. I'll also say that all three utilities have recommendations from plans, so wastewater plan, the storm water management plan, and then drinking water management plan that recommend certain rates for our CFPs in future years. And so we're not meeting our recommendations and in some cases specifically to drinking water we're actually reducing the CFP to have a balanced budget for next year.

Gary, can I just ask a clarification? I'm gonna take a wag at HRCC.

That

Human Resources Class and Compensation Study.

Is that Yes.

Is that what that is?

Yeah. Okay. Is there anybody from HR here? I think that's what it stands for. But, yeah, sorry. I didn't But

that's it's that class and comp study

You got it.

And their adjustments. Thank you. I just wanted to make sure that thanks.

Yeah. Yeah. Yeah. Good question. Thanks thanks for asking that. And then see. Next slide, please. So that's that's kind of a high overview trends for the three utilities. For waste resources, just brief organization chart. We've got 38 employees. Four programs are Dropbox, residential, commercial, and organics program. And just may the main thing to note here is that our residential and commercial programs represent about 70% of all the revenue earned. So on a 17 or $18,000,000 budget, that's quite a bit of revenue. The rest is, 20% in Dropbox and 10 in organics. But and that's to provide garbage recycling organics for Olympia.

Next slide. So three big budget drivers for this utility, the clean team transition. So through the 2025 adopted budget that was adopted by council that was to make the decision to have the clean team be brought into the waste utility. When we did that the rate increase was a phased approach two year approach to do that. So that is so we're making up that difference in our proposed rate package that you're going see here in a minute.

Another big thing is that Thurston Recovery Center rate increase. I would just like to say that Thurston County has finished their financial study. They made recommendations. They've gone through their process. I just want to thank Councilmember Green for being part of the Thurston County Solid Waste Advisory Committee.

She came in right at the heels of that plan finishing up. So her and I were able to sort of discuss the rates and not a lot we could really do about it quite frankly. But their garbage rate went from $119 a ton and proposed for 26 to $133 a ton. That's about a $500,000 increase in tipping to bring garbage to the Waste Recovery Center, which is a transfer station. And then the organics tipping went from $37 a ton to $75 a ton.

That's an increase of about 233,000. So the total increase just for Thurston County rate and tipping rates is going up $630,000. So that that's a pretty large increase on top of making up the difference of almost a million. The clean team I didn't say was about a little over $900,000 program that we were going to make up over two years for rates. So those are kind of the two big drivers and then we've got some of the other ones which I mentioned with the other wet utilities salaries as part of the competence salary survey.

Our fleet rates and indirect costs are up slightly, I'd say moderate, not as heavy. We've had some previous years where they went up quite a bit. So those are the pretty big budget drivers there. The one thing I want to note is that in order to balance this budget we're recommending that we reduce the capital facilities budget by $600,000 that's money that is allocated for Carpenter Road. That 600,000 almost offsets the, tipping cost increase for next year. So that's what we're doing to propose rates in order to try to keep rates as low as possible. Yeah.

Do you mind if just jump in? Yeah. Yeah. Sorry. I just wanna make one comment on the the tipping cost increases. If memory serves,

and and Gary, correct me. It's been at least ten, if not twelve years since those rates went up. So we never got a great explanation for why it wasn't just steadily adjusted with inflation. But it's very much a course correction from rates that had not changed despite the cost of them providing the same service going up. Yep. Correct. Yeah. That's everything for waste. And then this is kinda where the rubber meets the road here with just what our proposed rates are. So if you're to look at the utility rate proposal, where we are to produce a balanced budget, we're looking at a 4% increase in waste, 3% in drinking water, 3% in wastewater.

Lot is also doing their 3%. That's what they've been doing every year for the last few years, and they're con and then storm and surface water, seven and a half percent. That brings the total residential bill, which is the bimonthly bill to average to $334. That's about a 3.74%, increase. And that comes out to about, 12 well, not about.

Comes out to $12.04, bimonthly, so $6.02, increase, per month. And that's assuming that somebody's on a 65 gallon garbage cart and then, based on the 160 gallon of water use per day. So that's what the the that's what our our real rate proposal is here for you. I try to give you some high level and then give you all the summary detail that you have tonight. So that's it for the operating budget, but we now have one more slide, I think, or two more.

And then so then the next one is, is GFCs, so general facilities charges. So we're recommending a 5% increase across the board. Lot is also recommending or proposing, or maybe they've already adopted. I don't even know. But they it's a 5% increase, what I was told. So, if you look across the board now we do have a consultant recommendation at the far right, that column. So we have three plans. The most recent is is the drinking water management plan. That's 2022. We haven't been really following the recommendations our plans that call out where we should be at for GFCs.

And so a few years back, we looked at these recommendations and said, well, we can't make the full jump to go the full distance. We've chip been chipping away at it every single year. And so if you look at where we're at, where we're proposed so the 2026 rate in drinking water, for example, we're proposing for '26 will be at 5,551. The consultant recommendation is five thousand six thirty nine. So we're we're getting closer to some of those numbers, but those are older numbers.

We are also just beginning a multiyear rate study for all three utilities. That's going to be looking at general facilities charges, our capital budgets and recommend recommendations there, and then looking at our operating budget and rates. And then also there's some other tasks within that, embedded within that, like affordability and metrics and where do we stack up and how do we stack up. But this is, worthwhile work that we really wanna update because if you look at so for example, wastewater and stormwater, those plans are even older, and we still aren't even where we're supposed to be yet. And so we wanna be able to look at that and take a long term approach to getting to where we need to be.

So that's the general facility charges that are for you tonight. Is that my last slide? That is that is the last slide.

So I I just think we have to acknowledge the beyond belt tightening that I'm I'm really, really appreciative. I'm sure you've been watching and listening as we've been trying to figure out how to navigate these these next couple of years. And I I know you're definitely sharing in the pain, and I appreciate you and all of the staff who are asked to do more. I it's really grateful for that. And I wish we weren't asking you to freeze positions or put you know, not put money in the piggy bank for the new facility on Carpenter Road, but here we are.

So thank you very much. And I don't I don't see other questions, so I I suspect that means that we'll just we're not gonna affirm these individually. We're gonna do it as one motion at the end. Is that correct?

This will be one motion, but they'll also be bringing this before, council on the third.

Right. So our but our our committee recommendation tonight is one recommendation to move this package forward.

Yeah.

Thank you. Thank you all three.

Or Yeah. Thank you.

And now we have, Susan and Tim.

You look amazing. And Tom. Hi. Tom.

And and Tom. And Tom.

Good

evening. I am Susan McLaughlin, director of community planning economic development, and I will let each of my fellow presenters present as we move along or not present, of course they're going to present but introduce themselves as we move along. So in the interest of time, the Mariners game did start so I will continue. Next slide. So I'm going to be talking about our development fees as it relates to Development Fund six.

So we have an overall goal of meeting a cost recovery of 85%. So essentially that means whatever fee that we charge covers 85% of our staff time. To inform those costs, we do regular fee studies. The last one was done in 2021. This came up at Council last week, so you could be very familiar with it.

But in 2021 that was done and then we adjust the fees accordingly. We found at that time in 2021 that we were below that 85% and in fact we had a cost recovery rate at 76%. We do anticipate because of what we just heard about with the human resource comp and class study that that rate would be lower if we did the development fee study today. So just know that that's that continues to dip down. And like I said, annual increases are based on labor costs.

And whilst it says here that much of CPED operates out of the Development Fee Fund, that's in fact most of planning and permitting. And so as I understand, we've done this presentation many years, but now that CPED has grown larger, we do have multiple fund sources and more staff. So six pertains to certainly a lot of staff and perhaps even the majority of CPED, but I just wanted to caveat that. Our annual general fund contribution is $2,920,000 Now that's in 2026. Basically hopes to project where we're going to land at the end of the year and a good guesstimate based on development trends.

And so you can see that last bullet there, and you're well aware in your budget discussions that we have to add more from the general fund to offset some of the decline in revenue that we were anticipating. So that's an additional one time of $1,500,000 in 2026. Next slide. So like I talked about from that 2021 fee study, they recommended a 2.7% increase for permit fees to account for labor costs. Now, that directly aligns with our COLA, as I understand it.

We also another change in terms of proposed fee is a planning fee for minor variance application. It's at $1,000 We don't currently have that. And to move fire inspection fees from the fire code to Title IV, which is where all of our fees are located development fees. And that just enables more nimble updates. As you can see, it has not been updated in quite some time, the fire inspection fee. So recommending or proposing $39 to $85 to just finally just catch up with those labor costs. Yeah, absolutely.

Question on the new planning fee for the staff level. What would be, like, an average dollar amount for those variance applications? Like, how much does that $1,000 add to?

Well, we talked about this just before. You know, it it could be a vast a myriad of things and so it's hard to give you an average. Tim maybe Tim would better be better suited but

Yeah. So we added the minor variance as an option when we updated our permit process a couple years ago Because with this, pay a thousand dollars for staff review, and this is really for a minor, say, setback variance where we're trying to provide space in the property that's impacted by wetlands. So we'd rather have them go towards the street than moving closer to the wetland and have its impacts. And a reasonable use exception is is a very stringent process and not not there's a lot of uncertainty with that. And so, under current process, if we don't have a minor variance, you have to apply for a major variance, which is $1,500 plus hearing examiner cost, which puts you above $2,500 So this a cheaper route for those minor cases where staff can make the decision, which is appealable to the hearing

examiner. Okay.

Next slide. I believe I'm going to pass it to Tim anyway, so good segue.

Okay. So I'm gonna cover impact fees, and impact fees are much different than permit fees. Permit fees are cost recovery fees. Impact fees are intended for development to pay its proportionate share of of infrastructure costs as a result of, growth. And so under state law, we're authorized to collect impact fees, for a variety of things, and we in Olympia choose to do so for schools, and that's with both North Thurston and Olympia school districts through agreements with the school districts, parking back fees, well as transportation impact fees.

And so I'll be going through each each of those tonight. I also wanna point out we have several staff here that will support answering questions. I'm not the expert. CPED administers the program, but we don't come up with the fees and all the justification within the reports. And so today, we also have Dave Smith, for our transportation engineer, who's here, as well as Mark Russell. We have, Tammy Ladue from the parks department. I believe she's, online. We also have Denise Stiffarm and Debbie Cannon of the North Thurston Public Schools here to answer any questions you may have. Olympia Schools is not here tonight. They can be available on November 3.

However, they do not propose to carry out any, increases. They currently, they're at zero. They don't they suspended their impact fee program last year, because of, enrollment projections didn't support, any type of, capital facilities to support development or growth. And so they can they will be taking action today, the school board, this week. But I've gotten a verbal from the district that they don't plan to implement any type of impact fee for 2026.

One other thing I wanna mention before I get into the different divisions is that there is, state, senate bill fifty two fifty eight, which is adopted by the legislature in 2023, and it requires, us to look at impact fees in terms of the impacts of smaller housing units in a way to reduce those fees sort of for smaller housing units. It requires that we consider three factors within the the methodology, and that includes either by trips, which is the method that transportation currently uses. So the amount of trips they use has is dependent affects the amount of the impact fee. So a a smaller unit such as an ADU has less impact than a than a than a single family dwelling. But, also, you're you're supposed to also consider, if not trips, square footage, and number of bedrooms.

And, currently, that really affects those that charge impact fees for residential development. That would be parks and schools that don't use trips. And so the parks department before you tonight does not have a strategy for meeting that requirement yet. That's due by June 2026. By code, by law, it's we need to adopt it within six months of, adopting our periodic update of our comp plan. And so we have some time. Now the the schools, Olympia Schools, of course, doesn't have methodology yet because they're not charging impact fees, but Northwestern Schools has implemented a system where they factor in number of bedrooms. And so I'll be providing some information on that as we get to that slide. Okay. So first I wanted to talk about transportation.

Transportation impact fees are proposed to be increased by 10% across the board. And, again, these are multimodal transportation impact fees, and so they don't just cover vehicle lanes. They also cover biking and walking facilities as well. And so the current impact fee trip rate is $3,338 and that's projected to go up to $3,672 This is all based upon a 2021, rate study that was done for impact fees. The study calls for an inflationary adjustment.

Over the past several years, the city has not made the adjustments according to inflation to keep costs down for housing. And so at that point, currently, the consultant has identified there's about a 25% gap between the revenues we get from impact fees to paying for those projects, needed for that. And so this is really a catch up of past years, and so that's why we're at a 10% increase to help cover the cost for labor, construction materials, and real property. And so next slide, please. And so this is just an example of what those fees mean to individual different types of uses.

So the top three are residential, and we charge residential by the unit type. And so to see for single family, that goes up to $5,271 multifamily, to $2,982 and then multifamily for downtown and high density corridor is $17.00 $5 And then for the commercials, the bottom three, and there we based upon gross floor area. And so you see examples of restaurants, retail, and office, and this is per gross floor area. And so you multiply that by the size of the space, and that's how you get your your impact fee that's charged for a project at the time at the time of building permit. The next slide.

So these are the parking pack fees, and the parking pack fees, is for, again, for residential construction to support, park growth. It's based upon a study from 2022. And as you recall, the last three years, we were playing catch up because the parking back fees had not been increased for a number of years. And so there was a three year phase in plan where we increased it more than inflation to get to this point. But now that we're we've caught up, the proposal is for a 2.9% inflationary increase based upon the Seattle construction cost index as called for in their fee rate study.

And so you can see the rates going up. They have the amount of increase in the right column for each of the different types of residential uses from single family, multifamily down to, ADUs at the bottom. Okay. Next slide. Okay. North Thurston Public Schools. This, they just adopted their capital facilities plan last week, and so their rate is actually going down. And it's going down because they don't project any needed facilities for middle schools, only elementary schools. And so because of that they recalculated what the fee would be needed for those projects identified within their CFP. It's important to kind of point out too that I found out a little too late to put in the slide, but again, they're going back to a per bedroom cost.

And so what they've determined is that single family units, this rate applies for three bedrooms or more. For a single family of two bedrooms or less, that $18.47 goes to zero. And same thing with multifamily. Currently, they have the rate going down from $23.56 67 down to $566. If it's that's for a two bedroom multifamily unit. If it's if it's one bedroom or studio, the rate would be zero. And, again, do we have staff here to answer any questions you may have on that? Okay. Next slide. And lastly, the Olympia School District.

This one's easy because it's no change. It's zero to zero. They suspended their program last year. All the improvements they have within their CFP is for minor construction where they don't feel justified to to correlate that to as a result of any type of growth in the district. And so for 2026, again, we would not be charging impact fees for those projects within the Olympia school district. Olympia school district comprises most of the city with a section of with the exception of the Northeast section of town, Saint Franz Anderson, Martin Way, Lily Road, those are all within North Thurston. So we've gotten a number of multifamily projects there, but those are within the North Thurston Schools. And that's all I have, unless you have questions.

Tim, when do we do our next impact fee studies? It sounds like are they did you say that?

Impact fee? Well, it it depends. I know that well, you probably have transportation here to and parks could answer those questions because they administer those pro those studies.

Is there a a required frequency by law?

Nothing I'm aware of.

Oh, okay. So just when they start to feel too stale, we

Right.

Okay. Thank you.

I I wonder and I and I so I haven't been tracking land use committee real closely. Have you done a comparison of the three cities and other comparable cities recently? We we hear anecdotally often, and and you've helped me a few times over the years to explain once you get apples and apples that it's pretty similar. Can can you just speak for a moment to that comparison with the other two jurisdictions?

I yeah. And we I haven't done a comparable. We can certainly provide that to you. I know for the schools, they apply across the jurisdictions and sort of the same. So if Lacey has an impact fee program on North Thurston, it would be the same rate. For park impact fees, it's really up to whether or not they actually charge those fees, same with transportation. And so no. I don't have those numbers with me, but we can certainly provide that pretty easily.

Yeah. I mean, just generally speaking, I also haven't done the the analysis personally, but the master builders recently did an elected officials bus tour in which they developed a really comprehensive PowerPoint presentation, including, I believe, an analysis of different cities impact fees. Know, Olympia does rank higher, but I think you know, you'd have to unpack that a lot because there's also a lot of different variables, including our development fees and how it relates to impact fees as well. I mean, it's not applicable.

So And and it's I was really asking in this because I was along on that tour, but I'm asking in the spirit of trust but verify. So

I appreciate that. Yeah. Reference your sources. Yeah.

Hi. David Smith, Public Works Transportation. Just to give a little context, the impact fee we're proposing, the $36.73 is substantially lower than what average rates are charged in Washington. The average is about, $54.86. So, like Tim had indicated earlier, where the 10% is an effort in a little bit of a catch up, so we'll be looking at continuing that in the future.

Thank you, impact fee people.

My turn. Yeah. Good evening. For the record, my name is Tan Jeffers, deputy director of public works. I appreciate the opportunity to speak with you today about parking services program.

I'm here to provide an overview of the program, share information about our current parking fee structures, and respectfully request your support for an increase in citation fees. Joining me today, in the audience is, the director of public works, Mark Russell, our newly promoted parking service Supervisor, Gustavo Ramirez, back there and our extraordinary Parking Services Program Specialist, Chelsea Baker Van Drude. So to begin, I would like to give you a brief overview of the program. Parking Services was previously under CPED and officially transitioned to Public Works in February 2025. While the program's organizational home had changed, our mission remains the same.

We are committed to supporting a safe, accessible, vibrant downtown by effectively managing both on street and off street parking resources. Parking Services Program plays a vital role in supporting Olympia's economic development, promoting parking turnover for local businesses, and ensuring access and wide range of user, including residents, visitors, employees, and business owners. Parking services oversee the operation of enforcement of metered parking, permitted residential zones, time limited areas, and several city owned parking lots. We also manage citation processing, providing customer service, conduct community outreach and education, and ensure compliance with city ordinances and state laws. We have worked really hard to maintain a high level of service without increasing parking meter rates or citation fees since March 2020.

However, much had changed over the past five years. We have experienced the impacts of a global pandemic, rising inflation, increases in the cost of living, and higher cost of salaries benefit and essential technology system. As you can see on the first slide there, the fee remaining unchanged for five years. Our operation costs are now outpacing our revenue. Adjusting our citation fee will help restore balance and support the long term sustainability of the program.

And that's our Chelsea up there, the photo. Next slide, please. We we did compare, Olympia current citation fees with those in several cities north of us, And we found that our fees are among the lowest in the region. Low citation fees limit our ability to effectively deter repeat violations and to generate the revenue needed to support the ongoing operations and improvement of the parking services programs. We are proposing to bring our our citation fee up to keep pace with the annual inflation.

The goal is not to be punitive, but to ensure that our parking system remains effective, fair, and financially sustainable. This is not simply about revenue generation. It's about supporting a safe, accessible, and vibrant downtown while maintaining a fair and effective parking system. Additionally, the proposed fee adjustment support our broader goals to promoting parking turnover in high demand areas, encourage encouraging volunteer voluntary compliance, maintain reliable and effective operations, and reducing pressure on a general fund to subsidize parking operations. We believe this is a reasonable and necessary step to ensure we can continue delivering high quality service and adapt to future needs.

And the increase that you see up there is about 25 to 30% increase. And the CPI since 2020 hits increasingly up about 4.8 to 5% per year, to over the course of five year, you you know, you're looking at 25% increase.

Thank you,

This is a related question. And if you want to answer later by email, that's fine. But it just made me think of it since I was looking at these slides. So looking at like the unpaid space fee, some of that. So I find the app very easy.

I haven't used the meters in a while because I have the app. But off and on I hear anecdotes from folks about, you know, struggles with the app, like not accepting their credit card or struggles with the meters or that. Do you know, like, average, sort of what's the uptime of those meters? Or I don't I don't have a super clear question there but are all of those systems working often enough that that we even issue a lot of those citations or or what happens in that instance? Maybe you have a better question.

Well I can unfortunately, the last several weeks, probably two weeks there that we have outages with pay by phone system, they have done a huge nationwide system update and did not tell us about it. So needless to say, we were frantically working on solution to mediate that and to we released a statement through our Instagram and Facebook page letting folks know that nothing wrong with your phone. It is just something on our end that we need to fix and we received a few thank you from the public community members that appreciate us letting them know. So with most of the time it works really, really well. It is so easy to use as said and our goal and hope that we get to transition to pay by phone almost 80% of our area.

So we we're working on that. Yeah. I don't have the the data to to share up and or Chelsea, our data analyst, will be able to share more information with you.

That'd be great. Yeah. Thank you.

Yeah. The the a couple of days after the system was down, me and the waitress at my one on one with the city manager were out trying to figure out who came by and made label maker changes to all of the parking meters on 4th Avenue because we thought it was a scam. Oh, no. Yeah. And and thank you. Will we be able to get our lost revenue from the downtime back because we weren't notified?

The director of public works and I are working on as requesting reimbursement from pay by phone. Great. Of course, Chelsea given me the data on expected revenue loss from from the outages and we had already had a FaceTime meeting with Pay by Phone last week.

You for

having Because it's issues.

Yeah. I I think that's a good a a worthwhile ask given the Absolutely. Yeah. So I was wondering well, I wanna get my other comment about the app because I think it's easy to use. I don't think that something that we're paying for should be advertising to us by the government. So I I have a big problem with the parking app advertising to me every single time I pay Mhmm. My parking tax.

This I think that, Chelsea, you could help me answer this question as well. I think that was something new. I have used the app in the past, so I didn't get a pop up

ad. At some point, it started coming on half heavy on heart. So

Funnel customer.

I I see enough nods to know that you all agree with me Yeah. Even if we can't control it. And then I I thought that we had been talking about some bigger changes in rates and even, like, Saturday collection. Did we ever go towards those chain? I'm surprised to only see citation changes and not rate changes.

The reason for that is, once Mark Russell and I, were, you know, receiving parking service program transition to public works, we asked, CILI's leadership, exec team for some pausing time so that we could learn more about it and and resource need. What does that look like? We need to get gain some data before we move forward with after hour enforcement and weekends. And Lando Bauer, the previous director, have done very extensive work, and I have all those report. And Mark and I looked at them, and we just asked for some time to to go over them.

So that that's why we're pausing. And for the future, we are hoping to do a comprehensive rate study just like any other rate programs to learn are we keeping pace with everybody else or we too low, too too high, you know, a really formal judgment to that. And this time we only asked for citation because we wanted to a positive change in behavior. We want people to voluntarily pay the the parking fee so that they don't get citation. And then we'll wait and see for the, comprehensive rate study before we move forward with the other increases.

That sounds like really good logic to me. Thank you.

Thank you. K. Any other question?

Oh, just I it's it's a tough pill to swallow, a 25 or 30% increase, but I I understand the rationale. And and to council member Cooper's concern, I would also I would love mean, pay by phone is convenient that I can use it in all different cities when I travel. It's the same app. That's fine. The pop up ads on a public utility, I just wonder if there's an option to pay to not have those.

That's if if if there's a more expensive per transaction version of the system that doesn't tell me to shop at Walmart, that would be great. So that that's I I I have a I also have a strong interest in in that. And Chelsea already knows something about this. Welcome.

I can inquire with pay by phone

to see if that's an option. Yeah.

Anything else for Thanh related to parking? Thank you both for coming tonight. Yeah. Oh, you have one more oh oh, I beg your pardon. We have a budget adjustment.

Yeah. Consider okay. To the pitch. So Alright. So so here's the I I think it's important for you to see that with if you were to support us move forward with this site site patient fee increase, we will be able to have a surplus the balance of $16,000 and after we take care of the operation costs and everything else. This really help our programs to maintain, you know, with our technology and other tools and yeah. That that we need to do our job well.

I hear council member Cooper saying this used to generate and I think people have a perception that it generates money to the to the general fund every quarter you put in the meter, but it actually costs money to administer parking and time and shoe leather. And so so that's that's important for us, I think, to carry forward is that this is a essentially a breakeven

Yeah.

Budget with these increased fees.

K. Yeah.

Thank you. Thank you. Yes.

And now we have Amelia Layton.

Hello. Amelia Layton, cultural access senior program specialist, and I work with lodging tax. So as you know or may be learning, lodging tax is a restricted resource to be used specifically for tourism related activities collected in two components. The first 2% is a credit against sales tax, and the city allocates this to the Washington Center of the Performing Arts. The second is a noncredit against sales tax, which we have a competitive application process reviewed and recommended by the lodging tax advisory board.

Next slide. So the first 2% estimated budget for 2026 is 625,000. It's historically distributed one twelfth of the budget per month to the Washington Center of the Performing Arts. And just like the past couple years, we recommend distributing 90% of the actuals to the Washington Center and reserving 10% to rebuild fund balance and adjust midyear if necessary. Next slide.

This year, our competitive applications was the largest we've ever seen. We had a total of which I say to you every time I've come forward we had 39 applications, as councilmember Cooper can attest to, with a total funding request of $1,773,828, so the largest ever. Our estimated 2026 revenue for this 2% is 625,000, and our estimated reserve on January 1 is $1,170,000. We do have some multiyear contracts that have pre previously been approved, and that equals 234,300. Our LTAC committee met last Wednesday to look at all those 39 applicants and their scores.

They recommend funding 31 applications for a total funding recommendation of $1,040,066 Next slide is our funding recommendation. So it's a lot of folks that you have seen before and quite a bit of new ones. We had about 10 new to the funding in Olympia applicants and a few that we couldn't fund because we had to spend down about $600,000 or more, actually. So our total for recommended for funding for 2026, including those previously encumbered contracts, is 1,174,366. And I'll give you just a second to, like, look at the screen because I know that's a lot of numbers and a lot of stuff.

And if you have any questions about any specific, applications, let me know.

Was

there a a a common challenge with the other than just not having enough funding, was there a particular reason, the eight that didn't get funded? Was there something in their application that Yeah.

So applications are scored on a rubric, and so there's just general, maximum of a 110 points. And so some of those eight that didn't get scored, scored in the fifties and forties compared to some that were in the nineties and a 100 even. So it really is just a qualitative and then a little finagling because, obviously, some asks are bigger than others, so some not all of these received full funding. Thank you. Then my last slide is sort of our fund overview.

So our budget revenues for both those two for the 4%, essentially, is 1,250,000. Our expenses for both of those Washington Center and would be spending a 100 1,339,538. And then the bolded number there is pulling from the reserve with a difference to reserve of negative 683. Am I saying am I saying that right, Sean? Sean has helped me with all this math side of things quite lot. So I appreciate him.

Yeah. So essentially, the the two two percents are about 625,000 each that we have budgeted. So when we when we look at this page here and we see the total twenty twenty twenty six funding of 1,200,000.0, we have to come up with the difference from what we have budgeted in revenue of 625,000 for for next year. So that is where we have the the available fund balance in the lodging tax fund to be able to pay for that, those applications above and beyond the revenue plan to come in for 2026.

Mhmm. Yep. And that's lodging tax if there's no other questions.

Jim, since you were in the room, do you wanna speak a little bit to the decisions?

Yeah. And I think the challenge is so many, and we're trying to be more equitable in how we do this. And so the process gets longer every time you have more applicants and the review. And so we're trying to we'll we'll continue to see evolutions in scoring to make it more clear. So this time, Amelia did a great job changing the scoring so it wasn't just on a one to 10.

Like, we had a couple that were one to 20 or one to 15 so that you had more variety in the score for each question. And we asked the committee, would you fully fund, would you partially fund, or not fund? And that, in quite a few places, gave us a working majority of the five person committee going into the ranking that allowed us to do that. And I made a joke well during Counsel Mergreen's question, but I really do feel like there needs to be some emphasis by counsel on what are your priorities for the logic tax. Because there's a lot of different things allowed in the law.

And when you sit there with hoteliers who know heads and beds and want it to be all about that, and then you've got people trying to start museums saying, you can fund visitor centers, or you've got people saying, the cultural side of things is really important, and these things don't really fit with Inspire Olympia, I think it's a really good opportunity to step back and say, we'd like to see priority on things or points for things that are in our city, for instance, I think. And I'm using that as an example because this is the first time that we've had the regional athletic complex apply for funding. And it's challenging because the regional athletic complex gets nearly twice as much money as the hands on children's museum from the PFT. And and when you throw up another $45,000 grant grantee into the mix, then that bumps bumps money for other folks who have been getting money historically. And so I think but it's the case for that is that it fills up Olympia Hotels all the time.

And part of the question, I think, that's worth a conversation is the chicken or egg in economic development. Do people go to all the things because they're already here? Or do they come here for all the things? Or which thing draws them to town, and then everyone gets to use all the cell phone data for the whole weekend? And then I think and and then my last comment is just really big picture.

You might have noticed that this year, the county started the second 2%, the, like, ARP 2% that goes to the Washington Center. And they had some different interpretations around setup than we have our setup. I'm guessing that has to do with history. And so I've asked the city attorney to bring that story to the city council so that you can have a better understanding of how that all came about and where the things are written and where they're not because it's in contracts. And I actually asked former council member Hire, and he wondered if it might have been because of bonding from when they originally bought the building and some other random there's a lot of lore around this.

And so I think that it'll just be good, given that the county is doing it differently, to really have a clear understanding of where how we are doing it and to the future. Those funds are set in state law for publicly owned facilities, but not necessarily in your jurisdiction. And so I just wanted to make those couple of points. Not asking for any change, and we have a great relationship with the Washington Center, but I think we just need to be able to answer the question and point to the thing. So

Thank you.

Amelia, thank you for being here tonight.

Thank you. And

and what a nice segue to inspire after seeing this list of amazing events and places in town. Yes.

Good evening. I'm Mary Grace, Gadoo, and I'm the Inspire Olympiad cultural access program manager. Just a quick update. It is the top of the second, and it's tied one to one. I know. So we have a template for this. So if and and it doesn't have a lot of budget detail. But the major funding source for Inspire Olympia, the cultural access fund, comes from one tenth of 1% of our sales tax. That brought in 3,200,000.0 last year. It's expected to bring in 3.4 in 2026.

A minimum of 80% of that revenue is to go directly to cultural organizations in Olympia, nonprofit organizations who are providing public programming, with an emphasis on lowering barriers to access through things like expanded services, and, you know, expanded hours, and lowering their pricing. Up to 10% of the funds may be used to pay for transportation for public school students. In Olympia, we spend quite a bit less than that, because we don't have a long way for those buses to go. So we have supplemented the funding for public school programming by helping to pay for the field trips that they're going on, in addition to the bus transportation costs. And 10% can be used for administrative costs.

This is the quick budget slide that Sean provided for us. Thank you, Sean. What you'll note is that we're going to spend more than we take in next year. You heard about that in August. That's an intentional spend down of about an eighteen month surplus that's actually grown a little bit because we couldn't spend everything last last year. It was only our first cycle. Our community kind of wasn't quite up to speed yet. So that's the beginning of what you'll see us spend down. And that's just prediction, but that's that's where we're headed. Challenges.

Our grant funding, this is just a headache. It's just one of those things that your brain has to bend around every time you go to do the budget. But our funding cycle, our granting cycle runs July 1 to June 30. And mhmm. That's intended to facilitate planning and funding for public programs in the schools. Right? But our city budget cycle runs January to December. Right? So when I'm reporting out to you guys on budget stuff, often I'm using half of last year's granting cycle and half of the next year's. And so it's just it's just an ongoing, you know, brain bender.

Another challenge, we have a significant volume of contracts for a city of our size. Now I'm really only kind of learning, you know, other communities are starting to pass cultural access. We don't have a lot of other examples to to compare ourselves to yet. But looking up the road at Tacoma, their population is four times ours, and they only have five more contracts than we do this year. So their program is growing, and our program is growing steadily too.

But I think it's a testament to the depth and breadth of Olympia's creative sector. So I think and it's a councilmanic authority. Yeah. Meaning that when the authorization for cultural access, a seven year authorization expires, city council can reauthorize it without going back to an initiative of the people. And that's in 2029.

Mark your calendar. The other the other challenge is that this third bullet, we're we're getting to know our creative community, and they're getting to know Inspire Olympia. And as we learn more about each other, they're learning about the program, we're getting more applicants, they're getting more sophisticated in their in their in their planning and their grant writing, and we're getting to know what they need, we're we're recalibrating. And I think that's gonna be a continued process throughout all seven years of this program and beyond. Within that calibration, we have a goal to equity I hate that word.

Equitably fund both large and small organizations, meaning that, you know, we've got two granting pathways to kind of so we're not apples and oranges all mixed into one, you know, grant opportunity. Larger organizations have one pathway and smaller organizations have another. And, ideally, we try to split the money roughly $50.50 between them. That may not be the right amount, $50.50. Like I said, we're having to recalibrate as we get to know the community.

So once again, that's something we're going to monitor over time. The other challenge there within the calibrating is that of that smaller organization group, there's 56 of them now in the impact grant category, many of them are small to mid size, and they're growing. They're stretching. They're reaching. They've got this inspire money. They're doing things they haven't been able to do before. But they're vulnerable because of that, you know. They're doing more. They're more reliant than ever on, you know, they're hiring staff for the first time, and they want to be able to continue to pay them. You know, so the reliability of our funding is really important going forward for those smaller organizations in particular.

And then of the really small organizations and half of that impact group is have budgets roughly under $100,000 They're really small. They've never written grants before. They haven't had to get insurance before. They didn't have to have a city business license before. A lot of them are fiscally sponsored. So they need coaching. They need mentoring. And that's what we're doing. So those are our challenges. Just off the top.

Next slide. Looking ahead, I'd mentioned the gradual spend down. We are targeting to spend down to about $500,000 by 2029, which should allow us to ramp down and out if that is what the future calls for. If cultural access is reauthorized through either an initiative or councilmanic action, then we will have $500,000 surplus to continue to carry into the next cycle. We increased our granting opportunity.

You heard about that in August. And you're familiar with this, because you just described kind of how the point spread was enlarged with LTACH. And it's similar. It's kind of got more latitude to within, to look at those scores and consider, you know, funding more for higher scoring organizations, and really making a bigger impact with the funding that you've got. So that's behind, in addition to the spend down, you know, the need to spend down that extra money I want extra money to spend it down over the course of the program, we're also looking for ways to make a more a greater impact with the funding through the broader granting opportunity.

Funding for cultural access in public schools is budgeted to increase steadily as the program grows. We hired Molly Wilmuth just in September. She's fabulous, and she's hit the ground running. And she's already talking to teachers and school administration and our funded organizations. And I fully expect that program is just going to take off. And then the last note that the tax began in January 2022. It's authorized through 2029, councilmanic authority, to reauthorize, and we'll be coming to you and starting to talk about that in 2028. Thank you. If you have any questions, I'm happy to answer them. Awesome. Yes.

Not a question. Just a comment that it's cool to see this field trip part coming to life. My middle school my middle schooler has brought home, I think, now three permission slips this year already, and you can just tell their cultural access. You know, they went last week, they saw a mariachi band at the Washington Center, And it was full of middles a thousand middle schoolers. And that is Great.

That's really what I think the piece the the the what the beauty of the intent of cultural access and, like, so much change in the world comes from art. Right? And so getting these younger people that exposure and opportunity in a way like like, you can't even, like, think of what Olympia will be like in thirty years because of this investment. It's it's really cool. So thanks for keeping it.

It. Thank you.

Thank you both very much.

Jennifer Machado, economic development division director. I'll be going over the Parking Business Improvement Area, or I'll refer to it as PBIA. I can explain. So the major funding source for the Parking Business Improvement Area is fund one thirty five, which is an annual self assessment on downtown businesses. For 2025, the fund was set to a $0 fee, and no collection is planned again for 2026.

Currently, there are no budgeted revenues and a little over 2,800 in budgeted expenses that funds administration, which leaves a little over negative $2,800 to the fund balance. As mentioned earlier, the PBIA rate was set to zero for 2025, and we will go through the process to request an extension for the zero rate for all of 2026. As previous staff assessed the PBIA, a few key challenges were highlighted, including the PBIA fee disproportionately impacted small businesses, current rate payer classifications and fee schedules were outdated, and business records were not consistently kept up to date. Additionally, the PBIA revenue did not cover the city's administrative and staffing costs, like the advisory board staff liaison and admin support for meetings. It requires labor intensive recordkeeping and invoice processing and finance support, contract management, and complaint handling.

So looking ahead, the past and upcoming zero rate is intended to allow the PBIA Advisory Board to move through an evaluation of the program. After some initial hurdles, we're under contract with the consultant to conduct this evaluation and expect the project to conclude by the February 2026. The evaluation will provide actionable information for the PBIA to consider on how to restructure to ensure the PBIA is equitable, sustainable, and effective in supporting Olympia's downtown business community and is within the administrative capacity of the city.

And I'm happy to take any questions.

Oh, no. I'll step up.

Well, only because we talked about it so much last year and you weren't here, and I think that they paid for the flower baskets with some remaining funds from PBIA. And so does the current budget we're looking at have the flower basket program in it? Because we will hear more about that than anything else.

Currently, it is not in the 2026 budget, but I believe we can add that without problem.

Okay. And and I've lived in multiple towns where it's been the front page story about the city budget when you cut the baskets, including the one that our, CP and D director is from, more more often than not. And so it'd be cool to find a long term permanent partnership for that because I think it's something that everybody values. And I feel like there's just enough of those things that it doesn't make sense to me why not to keep collecting the rate while you go through the study. Because there's been some great contributions from PBIA to our downtown, like a lot of the murals and Mhmm.

Different pro you know, art and culture, I guess. So I'm I know I don't have a solution, but I'm just thinking aloud now.

We do expect for 2026 to be able to develop a work plan and budget. There are funds that are still in there that were not spent. And so I think that we'll have coverage for 2026 when we have, and then we'll be able to start collecting again at the 2027. So I don't think we'll have, a lapse in being able to develop, different projects

for PBI. That's really helpful. Thank you. Appreciate that. And then maybe that pays for the first thing I just said.

I can just add it. It's it's challenging sometimes to budget for PBIA because it is such a small fund balance. So we wanna make sure that we are as accurate as possible because, otherwise, if we go $1 under, then

because you don't know how much you're actually gonna collect. Yeah. That makes sense. Thank you.

Appreciate that. So I I think whatever we can do to formalize that we have a commitment to maintain the flower baskets would would be really helpful. That that is a a treasured part of downtown. And then I just wanna appreciate that to me, it makes sense to hold the the rates again. That's what we promised to the community as we were gonna consider this.

And look forward to your leadership as you work along with the committee and the consultant to think about because I I think that a a in the city business adviser group makes sense for your work alongside of I I know they're hoping to save up for a parking structure. At least that's what the goal was thirty years ago.

Might take a little bit.

Might take a minute. Yes.

We keep spending it on flower baskets. So, no, I'm I'm being a little bit facetious, but we're we're not really heading towards having rate payers save up for major infrastructure downtown. But it's been a valuable, I I believe, a valuable business advisory group to the city. And as Jim said, they've spearheaded a number of great downtown initiatives. So so I just wish you well in this year's work alongside the PBIA and the consultant.

Well, thank you so much. Early twenty twenty six, we'll be coming back with that study findings, and there'll be more information to share then.

Thank you.

Alright. Thank you all. I think we're last. I think. Jacinda Stelchis, CPED Housing Division Manager. And I will let Kim introduce herself. Kim Condrat, Homeless Response Coordinator, CPED. So Kim and I are going to have a little tag team as well. But also, we have go ahead. Yeah.

It is also kind of split between housing and homeless response. So major funding sources for housing and homeless response we have quite a few. So we have our general fund, one. We have Fund 142, which we refer to as Home Fund. Within Home Fund, Fund three eighteen is also kind of part of Home Fund.

We'll go into these more. And then Fund 107 is CDBG, Community Development Block Grant. Each of these fund sources, with the exception of general fund, has their own slide. And just a call out that for fund 142, that is our oneten of 1% sales and use tax, and 35% of that can be dedicated toward operations. And then three eighteen is also a portion of the one tenth of 1% sales and use tax.

And that is for capital. Next slide. So, again, and I apologize because after looking at this, we should have switched it a little bit. But 142, just the lovely budget slides that Sean has helped with. Thank you again, Sean. You see our expenses are outpacing revenues. And I believe that we will have a I don't know when the timing is, but that 700 will be made whole soon.

So so this is, just really looking at high level of of 2026. What are the the revenues that are coming in to fund January and the expenditures that are coming out? And so the the big result of that negative 700,000 that we're seeing is really driven by the change in the commerce grant for the encampment reduction program. And there were a lot of reductions in grant revenue associated with that program, but those costs did not go away. The Plum Street Village is one that a cost was gonna be reducing, but Franz Anderson, Quincy Tiny Home Village, and some of our other mechanic cleanup costs, those costs are still increasing.

So we wanted to be able show what this slide is. The revenues are not keeping up with the expenditures in the home operating fund.

K. Thank you, Sean. Next.

I will I will also add there is fund balance to cover this this deficit into 2026 also. But moving forward into 01/2027, there's more work that needs to be done to be able to structurally balance this fund.

So is this including the general fund then in this total picture? This is just in fund 142. 142. Okay. Thank you.

Alright. Next slide.

So fund three eighteen, again, this is our capital side of the one tenth of 1%. And just which is also our one tenth of 1% sales and use taxes referred to as home fund money. So we have home fund money in the home fund, which has several sources. Not confusing at all. So we, City of Olympia, have an interlocal with the county.

We transfer our capital funding to the county and pooled with their funding as well. So we, City of Olympia, have had this funding since 2018. The voters approved it. And then the county council medically approved their home fund in 2022 and became active in 2023. So we have combined our funding since 2023.

And that is released annually through a request for proposals issued by the county as a fiscal agent for Regional Housing Council. So this funding has supported approximately seven fifty units. That represents about 20 projects. And since combining our funding in 2023, and I do want to really emphasize that these are not all units that are active in service right now. So these are units that are in the pipeline.

Some are active. Some are in the pipeline. So just calling that out. And then annually, around 15 nonprofit organizations receive funding as well for homeless services activities. Next slide.

I'm sorry. Can I guess you're

good? You're

good. And then community development block grant is a whole another fund, fund one zero seven. This is federal funding received by HUD annually. We are a entitlement community here in Olympia and have been since 1982. Annually, we receive between $350,000 to $400,000 This program year so our program year is also different than our city year.

So this is funding that we are typically receiving and putting out into the community between September 1 and August 31. Well, I think I have another slide, so I won't jump into that. About 65% of our CDBG program manager salary is paid by this grant. And then per the federal code, this funding must support people that are with incomes low income households, so incomes below 80% below or equal to 80% area median income. Eligible activities include affordable housing, economic development, and slum blight removal.

And then the majority of our funding in Olympia, we do direct toward affordable housing activities. Next slide. Challenges. So, this funding, Fund 142, includes a rental registry, which just as a reminder does have its own revenue source, but it is part of Fund one hundred forty two. So, registry and inspection program itself, expenses are outpacing revenues.

We visited you all in August and gave you a very lengthy update on that, But certainly open to more questions. And then, as again, we talked to you all in or the full council in August, we are really finding that in order to fully operate that program, would be nice to have additional staff. So just keeping that on the radar maybe for further years. Other challenges, again, home fund, the one tenth of 1%, is the sales and use tax. So we are really kind of reliant on what that is doing in the community and the amount of funding that we were able to put out.

The amount of funding we're able to put out through the RFP as well as amount of funding we're able to generate for operations is very reliant on that. Switching gears a little bit, our CDBG grant agreement, We have received that this year. It does include new language that we haven't seen in the past requiring compliance with executive orders.

So

we and I have more more on this on our cdbg challenges as well and but looking forward looking forward we do anticipate we'll be joining a lawsuit to access that funding. Other challenges, you are seeing here today division managers. Kim and I, you're not seeing a division director. So Darian departed for rainbows in Oregon at the beginning of this year. Kim and I have kind of taken on stepping into these division manager roles.

But certainly that has we felt that impact, you know, as we are doing what we were doing before we lost Darien and now also taking on division manager responsibilities as well. So that just, you know, just putting that out there that it has caused shifts in staff workloads and decreased ability to really accomplish a lot of our goals, or at least in a in a what feels like a timely manner. And then I think you know we can probably skip that last bullet for now, but certainly decreases to staff just in general at any point impact our abilities to carry out big plans that our community has helped with and been vocal about. Next slide, please. Looking ahead.

Rental registering inspection program are so, again, we came to you all in August. And that new application two applications, one for smaller landlords, one for larger, is active. We're getting good feedback. We're getting good registration. Sarah is working very hard, as well as Jody and Christy and Woody in putting out all the communications, letting people know that that's active, walking people through the process, working out any bugs that came out.

We also had an update to SmartGov that we were not anticipating similar to the the parking. And then funds 145 and 146. These are related to the affordable housing, the affordable housing emergency declaration. And these are the funds that were set up for the infrastructure assistance grant. So we legally, because we are collecting funds from both wastewater and drinking water, two separate funds are set up so we can make sure that we are tracking those and they're more accountable.

So those, again, were set up in late twenty twenty four. And our we're working I think Public Works is working to codify those so it's ongoing instead of a a one time funding. And if I recall Sean, please correct me if I'm recalling incorrectly, but I think we have about a 130,000 between those those two. So not a whole lot, but is but is something to help affordable housing development. And then we will continue offering our affordable housing development incentives to support our comprehensive plan goal.

As a reminder, some of those incentives include exemptions of impact fees, school, park, and transportation. And then I had also mentioned earlier, as the language in our grant agreement with HUD currently stands, we are not able to comply with that grant agreement and access CDBG funds. So we are moving ahead with joining a lawsuit to access those funds and get that

funding into the community.

Next. I'll hand it over to Kim.

Sorry, before we move on, while so first off, thank you for not signing that grant agreement and pursuing this and all that good stuff. However, while that is in process, what's the impact to folks who typically receive CDBG funds?

Yes. So Anastasia Everett manages CDBG. It has been wonderfully on top of all things CDBG. And we had a feeling that we might be in this situation, so very early started communicating to the community, our nonprofits that applied and were made aware that they had awards and that we could be in a situation where it might be more difficult. So, she has communicated thus far.

The series of communications was we haven't gotten our grant agreement yet. We are not sure what might be in there. We are tracking across the nation. And we've been talking across the nation and have seed and a grant agreement that has this problematic language. The most recent communication has been we gotten our grant agreement.

We're trying to figure out how we can actually get the funds out accept the money and get the funds out. So, has been a lot of communication. The nonprofits do know that it's going to be a little while before they are able to access the funding. But as of now, we plan to still get it out into the community. I'd say probably like November, December.

Are there any tools the city would have at our disposal if the council said we wanna cover these grants until we can get reimbursed from the Fed? Or is that just are these funds so separate that

oh, I stumped them.

Yeah.

That we can certainly check, but there's such clear rules and regulations around these monies. We'd really need to be careful so that we're complying through audit processes, both state and federal. So we could certainly check and get some answers, and prepare for that for you.

But we haven't awarded them. Right? Or do we have multiyear contracts that are some of that's obligated?

Yes. So this is program year 2025 funding, which started September 2025 and then goes through August 2026. So, have not executed contracts, but we have made awards and let recipients know of their awards. Okay. If it's at

all viable, I'd love to see that research. And I just say this from the frame of reference that in higher ed there's things we typically get federal funding for that we don't have yet. And we have said we're going to cover those with local funds because our expectation is that those funds will be released at some point. So I don't know if there's any kind of equivalent process, but I feel bad that the nonprofits are the ones who have to be on the hook while we navigate this.

So then are we how are we funding the staff position in this coming year?

So so oh, sorry, Mike. In in one of the slides, previously, you had seen that, the CDBG program manager was funded 65%. So and that's due to the the admin cap on CDBG funds, which means you can only spend 20% of that of that funding on admin support. So when once she reaches that around 65% amount, then she was charged to the home fund. So part of the the home fund's, fund balance there. So I think looking at options of being able to charge her staff time to the home fund as if she'd already exhausted that 20% is is is one option.

Helpful. And and and as you were talking, a a whole bunch of CDBG stuff flooded into my head, and I won't I won't belabor this. But is there any does the not signing the terms and conditions change our ability to operate with the existing CDGBG pot that's already in house? And like if grant if funds came in from a sale, we'd still be able to use the the pot that's in the city.

Yes. I I believe you're referring to the the program income from the single family

Yes.

Yeah. That is not subject to these new rules. So, yes. Okay. Anna is continuing to manage that. I I will say no. I won't say because it'll just convolute the whole conversation. So, yes, program income is separate than Okay. Than new funding. And that new funding amount is about 341,000, which I did not mention, I don't think.

And then we have Anastasia, unless you know this, but have her email us how much is in our CDBG fund balance. Because typically, we're holding I think it's like we have to go below 80% by June or some spend down requirement, but we hold a little bit.

Yes. Yeah. We have to spend down all of our funding. So that includes our new award plus the program income. We can't have more than one and a half times our allocation, which is the three forty one. So part of the annual action plan that governs CDBG on it had identified where program income would be allocated if we happen to have more than we anticipated where it would be allocated. I can certainly follow-up with her and have her follow-up with you all about our balance specific to program income though.

Yeah. Well, and I think whether any of that balance is free for towards what she was asking to make because it's still CDBG fund?

It is still CDBG funds, but that because it is program income that was made from that specific program and is part of what's referred to as a revolving loan fund. Yes. So it it has to be recycled back out for the same use.

Thank you. Appreciate that. Out and around the barn back.

Hi. Homeless response. Just before we even get started, just to let everyone know, like, I've been in this position for over four and a half years. And when I started, we had 12 ish we've had, like, several large encampments. And so we have pivoted from going from a reactive response to developing a process so that it's trauma informed and we put hygiene and safety at the forefront of why we make these decisions and it's aligned with our one community plan.

And so, that being said, there's a lot of challenges, though, because a lot of the things that we do are cleanups and getting unanticipated expenses come up, and usually of an urgent nature, which usually is a bit more expensive as well. And we've had 12 encampments located on different properties. We also had different vehicle encampments, including the one that everyone remembers is Ensign, where we had over 90 RVs there. But we have pivoted instead of just doing a clean sweep of the area, knowing that they would set up somewhere else, which would also use more of the city's resources to actually try and to find them housing and shelter. And we've done that pretty successfully over the last few years.

That being said, we have of those 12 encampments, six of those were identified as the right of way or the encampment resolution program that we're able to work together, collaborate with the Department of Commerce in setting down these right of way encampments. And so we also have this budget that they've given us. So they're going to give $1,200,000 for Franz Anderson, where we have 50 tiny home there for the purpose of right of way. They're also going to continue funding for just one year over at Quincy Street, where they pay for 30 of those beds. And then because our team is the outreach team now developing or managing the binding lists and placements into those, they've given us some money and then the admin costs that we have here.

So Punnett Street will not have any funding after December. They've already stopped the Roe funding. We are using our city of Olympia funding to finish the contract that we have with Vallejo, which was a very successful site that was sobriety focused and employment focused and has been really wonderful for the folks there. But then we had a lot of unbudgeted costs. So it was identified that there were hazardous trees in the jungle.

To remove them, it was about $190,000 to remove those for life and safety. We just already completed that. And then we are in the last couple days of closing down the Percival Encampment. And we had kind of set that down in four different phases. And we're on the very last phase, but each phase is about over $100,000 of anticipated costs for the cleanup.

But we are on the last phase. So after this, we just have the one large encampment left over at The Jungle. Some of the work that we did at just to give you an idea of how much it cost, like, we did a large scale clean last year over at The Jungle in fall of last year. And then we also put a fence in there to help with the area of businesses with the cross through traffic. We put that on the property line.

But that was over almost $250,000 And then we're expecting our operational expenses to increase over at our tiny home villages. And the state law limits 35% of the home fund for operational purposes. Next slide, please. And so looking ahead for this next year, part of our One Community Plan is that we've committed to prevent new encampments from starting. And my team of three, four of us total, have done a really great job doing that, but then also just how to support the existing encampments.

We also part of it is we also maintain the vehicle liveaboards there. And so since we updated the ordinance last year to include the vehicle liveaboards, we're really less than 10 RVs actively following, definitely different from, like, 90 to 100 that we were before. So that's been very effective, our team's out there. So just continuing that, we at this plant we're in the brainstorming stages right now of the jungle. But in light of, at this point, we do not have a clear cut plan with any dedicated money to that.

So that is one of the big challenges that we have. And then also, with Plum Street Village closing down with the sale of the court property, we're gonna we're trying to find monies in order to also not lose the buildings that have that are there at Plum Street Village. There's 29 tiny homes and community buildings, and we're trying to find the monies in order to move them over to Franz Anderson or existing tiny home villages. So, anyway, so that's some of our challenges and what we're looking forward to.

So any questions?

Have you been able to use any stormwater funding in the riparian areas for the cleanup?

You know, that's a good question. I don't think we have. I don't know what the limits are to I don't know how to go out and do that, but

I can I think it's just an internal conversation to see if there's alignment and funds available? I mean but I do think, like, in the last stage of, like, getting the garbage out of the riparian area when you're not dealing with the people, it's a very applicable stormwater conversation. But huge accolades, like, just getting the questions around closing camps and what's happening with people and asking the city manager how much is true versus not. It's been really heartening to see that we've been able to move towards a proactive approach to this and really look forward to seeing what you come up with. Are you hold are you starting to hold a placeholder for the Jungle funding in your budget, or is that completely unfunded at the moment?

Completely unfunded right now.

Okay. So then that's something to really be thinking about as we move towards the final budget.

And, you know, our housing team had applied for, part of the plan, but we didn't receive the funding. They had spent, like, a year, year and a half, I would say, putting an application, and we didn't get it. So it's kind of back to the drawing board. So if you have any ideas, let us know.

Go

ahead, Jim. So I guess the other thing that is in my mind is the transition is our transition plan budgeted for the original tiny home village? I lost the name. By the

Street. Palm Street.

Palm Street. Well, there's a small portion that was given through the sale, but it's not enough. And so we're needing to find other funds. And so we've been working with Sean to find a little bit more. Right now, we're in the process. We just got a estimate from one of the contractors to see how much we can afford. So we're in the middle of that. But, yeah, we don't know if we have enough funds. Yeah.

Yeah. I'll just add briefly. City manager Jay Bernie's been in conversation at the at the regional level about a regional focus on the jungle. And so there's been some early conversation. I'll probably continue at the regional housing council in terms of a regional focus on ensuring that units start to become available and what that plan is in term for addressing the jungle.

Is the Shelter in Lacey open and full yet?

I'm just gonna join you guys.

Yeah. Welcome, Susan.

Would you

like to answer that?

Yeah. So first, I wanna talk about the the jungle because it's pertinent. As as, assistant city manager mentioned, this you know, that our primary focus was on Perceval. And so now that that's largely, I mean, the cleanup is still happening. We are only just as a team able to come together to really develop a work plan.

That is happening literally today was our kickoff. We are really treating it as a system. Right? You bring up Maple Court because it is really a capital program that we are talking about with operational funding coming to a close. Really, you can see that faucet kind of turning off, getting slower.

We really need to find bricks and mortar solution. And we're only going to do that by engaging with our regional partners and coming up with solutions using all available fund sources. And so we recognize that. And we also recognize that we have the timing. There's a bit of pressure to make sure that the jungle is both communicated for closure in a way that then it becomes manageable, more manageable, recognizing some of the health and safety concerns that doesn't grow further, but that we don't notice it too soon, too, because that can create problems in terms of social unrest within that space.

I just wanted to mention it's complex. We're working on a work plan. Right when we have that work plan, we will be starting to communicate it, daylight it, talk with regional partners to really flush it out. But so right now we don't have specific answers, but I guess I'm just really hopeful that now I think when we can bring our focus solely to the jungle that we have an opportunity to make some pretty pretty permanent solutions with limited funding, understandably. But but, again, I think we have the right team in place, so I'm optimistic.

Ah, yes. Maple Court. Did you notice that strategic avoidance? Yeah. So Maple Court, has its its had its challenges no one is avoiding that, and the challenges are not only contractual so, Lehi is under contract with the County, that contractual obligation, speaks to you know how many units are operational, who are they available to, and there have been issues related to permitting because of some hazardous events. I understand that it had some leaking.

Is that correct?

Yes, leaking. And that then brings in the city of Lacey from a permitting standpoint. Not only that, but then there is a commitment to make a portion of that for permanent supportive housing, as well as shelter space. When does that transition happen is also the point of this conversation. Because, right, as you are amending a contract, and as you're permitting some of this, building work, so tenant improvement work, you really have to be thinking about is this a temporary or long term solution and how is it going to be designed and permitted.

So I just want to emphasize it is front of mind for everyone. It is a key part of our homeless response solution, not only now, but as we transition some of our tiny homes in and out of the system, it's going to be so critical. So we're in the middle of it, but we're not the answer to it right now. But we're really close with our regional partners in understanding it more.

Guess when we get to legislative priorities for this year, that the right of way encampment resolution program is super important to us that we've we've stood up all of these facilities that need management. And and so and I just I just wanna shout out that that's the faucet I think you're describing that's been slowly turning that we already had a a reduction from what we thought we might get this year. And then I just wanna plant the seed that as we're budgeting for that unfunded project around the jungle that five years ago we were down to about 80 people living there and it's north of 200 now. And so there are a a big community of residents who also will, I think, need to be considered as residents and we figure out, you know, both what we've been doing of of helping our staff and funding nonprofit advocates to go in, but also just treating them as people who live in Olympia who are in a situation just as if they were in an apartment complex on Auto Mall Way that had black mold, and we figured out how to advocate for those folks. So I I just I just wanna recognize the the people in there are people who live in Olympia as well as clients and challenges and whatever else.

So I I just I just I was meeting with some folks yesterday and just some people who've been several years in the in the jungle. So I I just wanna wanna shout that that I think that that's part of our our imagining what resources it'll require is it's it's a lot of human beings. So thank you for continuing to wrestle all of this.

Yeah. Yeah.

So is there anything else under housing or homeless? Do you have another slide?

No. I I was just wanting to I'm I'm not sure about that number at the jungle, so I just wanted Sure. That's a speculation, and I would not confirm that.

Sure. Well

If that's okay.

No. I I understand that there are and there have been for each larger camp different opinions about

Mhmm.

How and who you count and when you make a marker in time. Yes. K. Absolutely. K. Yeah. Do you do you feel emotion coming on?

I don't know for emotion if

I could find some verbiage.

You didn't put into anything. Right?

Mm-mm.

Well, these these last slides must be for Mike for your report. So what did we hear? So first, we'll we'll finish this item. Please. And do you want me to there. I'll I'll pull it up. Or do you already have it? I've got it. Are you ready for Oh, please. What's that, Ken?

Oh, never mind.

Okay. In that case, I'm gonna move to approve and forward to the full council the recommended 2026 utility rates, general facility charges, impact fees, and special revenues including Inspire Olympia, lodging tax, parking and business improvement area and housing homeless response program budgets.

Second. All of those in favor say aye. Aye. It's unanimous and we make our recommendation to the council to approve these. Yeah. Thank you. Thank you. Thank you all for staying tonight with us.

Yeah. Three one middle of this.

Got a lot of hockey fans in the room. Let's do it. Alright. Fifth. Middle of fifth.

Middle of fifth.

Okay. So finance director Mike, do

you have any reports this evening? Yes. Thank you. I'll try to move through this since I know it's late. City manager Bernie and I worked on a presentation.

As you know, last Tuesday at the October 14 study session, we met with council, spent a good amount of time talking about budget balancing, but also revenue options. And so we just wanna run this by you to make sure what we're hearing is what you heard and that we're proceeding in the right direction. So the first part of the, really, budget balancing is surrounding these two new revenue sources. So the first is what we're calling the public safety sales tax, sometimes also criminal justice sales tax. City manager Bernie, interim police chief Parker, and I met last Thursday to talk about the application for that.

We're also simultaneously working on an ordinance that would go to council on November 3 for council's consideration of that. The ordinance needs to be adopted, and then we can make application with CJTC, the criminal justice training commission, for them to review the city's application and, really, are we adhering to the, steps that are necessary to be able to be granted that? So we're working very quickly on that because, as you know, the timelines on these are pretty tight around this. And then that brings us to the second revenue option, which we heard consensus from counsel to move forward. What we're calling scenario four, which we've outlined here, it's moving all of the categories to point zero zero two, except for retail.

It would move that up to point zero zero one five from its current place, while all of them are at point zero zero one except for service and other activity, which is already at point zero zero two. So it's moving all of those up to point zero zero two, retailing to point zero zero one five, the threshold to 500,000. So we're working with legal to, prepare that ordinance also for council's consideration on November 3, getting the, Olympia Municipal Code with strike through so you can see the before and after. So both of those will move towards council on November 3. That's really as soon as we could get those, in that ordinance form.

Obviously, we need to have that decision, it'll have a first reading on the third and then a second, reading on the tenth. The other part of the equation for the revenue is since we're planning conservatively that the sales tax would only have about a half a year of revenue, and then council supported the 1,500,000.0 of REIT to backfill that. And that's from the project that funds are set aside for, but we just aren't going to see that happen for several years. And that is a purpose we can use REIT for as well as as the bullet points out here, the city manager's proposed reductions of 1,200,000.0. And those really, I think, we can describe as bringing the budget into a bit more of sustainability because we know the revenue options alone don't balance.

And so we all wish we weren't there, but we're hoping that this brings the budget to a place that we can be in a better balancing position looking at 2027. So does that seem because those are some pretty big pieces of what we talked about with full council last week. Does that seem like we're on target there and moving those forward at a pace you're comfortable with as the finance committee? And

That aligns with what I heard at last week's meeting.

Thank you.

Okay. And then just to quickly move through some of the other parts. So the next slide is what we heard about some support for general fund enhancements that were included in the city manager's budget that we're preparing for consideration. That includes the Olympia Fire Department bunker gear that's historically just not been budgeted but spent. We're memorializing that as part of the ongoing general fund budget, jail costs, that increase of $900,000.

So we're trying to rightsize this so we're not just expecting that we're going to have these costs but not budgeting for it. So I think this is creating, again, in my opinion, a a more sustainable general fund budget. We're putting into the budget the money for an emergency manager as we heard support from council last week, the Olympia Downtown Association guide expansion, so continued funding of that, and then the Olympia portions of the home energy score. So we heard council supportive of that, so we've gone through and included that in the budget that'll be coming to council for consideration in the coming weeks. And then the next slide is the support for this four person sidewalk repair team.

This is funded by the TBD sales tax. I think this is something that we've all heard, support for from our community, but council was supportive of this last week. So this is onetime equipment cost of a $149,000 and then the ongoing team of, employees that will execute this and work on it. So that's also we heard a clear message on, and that's included in the budget. And then these are revenue neutral on the next slide, enhancements.

So an additional firefighter, will be added. This is, as we heard in a presentation, really, from the departments back in August, due to some scheduling changes, they need this position just added in. We're hopeful and, believing that this will redo be offset by a reduction in overtime costs. So that's why we're calling this one revenue neutral. The Climate Resilience Coordinator, it's grant and funding supported from other jurisdictions, so it's neutral.

The launch of the safe housing and rental efficiency program, again, grant supported, revenue neutral. And then the Climate Energize fellow, it is similarly grant funded and, support from other jurisdictions. So those we heard to move forward and support, they're revenue neutral. So I'll keep moving. On the next slide, the rest of the enhancements then are the grant funded Energize Olympia marketing and outreach, the Olympia strong implementation, so that's the $200,000 funded by a combination of general fund and, economic development reserves, and then the sea sea level rise collaborative, the support from other jurisdictions.

So all of those, we heard support for, and we've included as we're preparing, to move the budget forward. So I'll pause there. That's kinda bringing us around then towards the budget calendar.

Great. It looks like folks are okay. And, you know, we have talked over the years that before council member Cooper left city council, he wanted to see bunker gear as a regular item because we have used different named year in balance fund reserve savings, council goal, all these funky little buckets of as we close the books out to fund the firefighters gear each year. And so we've just there. We've talked about this for a number of years. So your your proposal to memorialize it as a line in the in the general fund budget is very welcome, even though it's a small part of this whole thing. I I think it's

a significant gesture. Thank you. So the next steps on the budget calendar, I mentioned there's a lot coming towards council over the next month, particularly November. We'll have a number of things happening on the third. I mentioned the ordinances.

They're not even listed on here since those are kind of a new development. But we wanted to get those to council, as I mentioned, so that we can plan the budget accordingly. So, we feel like that needs to come soon so that a decision can be formally made. As well as you move forward, the rates feed special revenues, those will be coming to you. And then the first hearing for the operating budget and then the first and final public hearing for the capital facilities plan and transportation improvement plan are all on November 3.

That's a Monday night. And then the following Monday night, it's not listed on here, but we'll have a budget update just to touch bases with council and make sure everything's still on track. Plan for that to be brief, but just a touchstone with the full council to to kinda bring us around. So no decisions, but just are we on track and everything's looking, on time, which brings us around then to November 18 where we'll have the second public hearing on the operating budget. And then we also on Thanksgiving week, that Tuesday, on Zoom, we'll have our final balancing presentation and just kind of a recap and where everything is before we bring it around to the ordinances for budget adoption, if you will, in December.

Yes. Just to clarify, did you say there was a Monday, November 10 check-in?

Yes. It's just a part it it'll be a part of just the council meeting. Nothing formal action wise, but we wanted, city manager and I just wanna bring a update to you to make sure we're still on target, that everything's looking as we expect, you know, knowing that the ordinances for revenue kind of where those are at. We just felt we wanted to build in one more touchstone, if you will, on where the budget process is. We'll just we'll talk

about it every week until we vote December 16. Literally. Yes. Yeah. Yeah. But any any other questions, thoughts about the calendar? You're alright? It's tight. Yes, sir. It is. Yeah. Anything else you need from us this evening, Mike?

No. Thank you. Thank you for your and support with

this. Yeah. Well, are there any other reports or general good of the order from anybody? Sean, thank you for helping run the technology today. It's not easy when the machine doesn't cooperate. Appreciate that. Then we will adjourn this meeting of the finance committee at 06:58, and and this wait. Back on the November 17?

Back Mhmm.

On the November 17. We're good. So we have one more with Jim. I was gonna get December? I was I was gonna get weepy, but not yet. Alright. Okay. Well, thank you all. Have a good evening.