City Council - Regular Meeting

Thank you.

Good evening, everybody. I have 6.02 p.m., so I will call the August 24th City Council meeting to order. Would you all please join me in the Pledge of Allegiance? I pledge allegiance to the flag of the United States of America and to the republic for which it stands, one nation, under God, indivisible, with liberty and justice for all. okay let us do some sound checks i think that we have uh council member cleland mcgrath online can you hear us yes i can thank you all right perfect there's one uh council member mcdougall is not present Right. That's right. Yes. And Council Member Moulton indicated she will be just a few minutes late. So we should expect her in a moment. And when she arrives, we'll note in the minutes her attendance.

Mayor Walters.

Mr. Fantini.

I move to approve the absence of Mr. Currier. Second.

All right. And so with the absence of Mr. Currier, we have a motion to excuse that absence. All those in favor say aye.

Aye.

Opposed say no. The ayes have it. That motion is approved. Okay, we're moving on to item three, which is announcements and committee reports. And the very first thing that we are doing is our police officer swearing in. So we will get started with that right away. Chief Floyd, would you like to come and introduce this item?

Thank you, Mayor Walters. Good evening, Council, members of the public. Our introduction of new officers is always my favorite reason to come to Council. Not that budget discussions aren't fun, but this is all much more enjoyable. So tonight, I'm here to introduce to you our newest graduate from the Academy, Officer Riley Canneller. And Officer Canneller is a California native that moved to Anacortes with his family in 2021. He stood out to our panel as an excellent candidate when we interviewed him many months ago, and they strongly recommended that we pursue hiring him. They were correct, and I quickly noticed Even prior to the Academy, he has a strong interest in learning and just gaining as much knowledge as possible. And that served him well at the Academy. He performed well there graduating last week, and we're here to support him in tonight. He also, during the academy, completed his bachelor's degree with Western Washington University. And that is no easy feat because the academy by itself demands a high level of commitment to successfully complete. And so the fact that he was able to do that while also completing his college degree was impressive. Joining us tonight to witness his oath of office are his father, Dave, his mother, Karen, his sister, Jordan, his uncle, George, his aunt, Sandy, and his girlfriend, Uno. Mayor Walters, will you please administer the oath of office to Officer Cannella? Thank you.

Want to do a sound check?

Check.

All right. Let us raise our right hands and repeat after me. I, Riley Kenneller. I, Riley Kenneller. Being first duly sworn. First duly sworn. Sorry. We'll do that again. Yeah, please. Being first duly sworn. Being first duly sworn. On oath. On oath. Depose and say. Depose and say. I will support the Constitution.

I will support the Constitution.

And laws of the United States of America. And laws of the United States of America. The Constitution. The Constitution. And laws of the state of Washington. And the laws of the state of Washington. The ordinances of the city of Anacortes. The ordinances of the city of Anacortes. And faithfully and impartially. And faithfully and impartially. Perform my duties as officer. Perform my duties as officer. For the city of Anacortes Police Department.

For the city of Anacortes Police Department.

To the best of my ability. To the best of my ability. So help me God. So help me God. Congratulations. Thanks, sir. Okay, now the people that you were here to take a photo with.

Council would like to shake the hand.

Thank you all and welcome aboard. Usually we have more council members here to shake your hand, but we will get those in later. Thank you all. See you all later. Okay, some additional announcements tonight will appear on the screen as we roll through them. We'll give people just a second to file out. Okay, we have a new addition to our website. That is some emergency preparedness information at anacorteswa.gov slash prepare. Certainly one of the things that I heard the most last year during our campaign season was about e-bikes, but also about emergency preparedness. And having already tackled e-bikes, here's our next accomplishment. uh some of the work that we are doing with respect to emergency preparedness will lead up to the great american shakeout on october 15th so the city will participate in this and we encourage members of the public to do as well your organizations your businesses You can find out more information about the Great American Shakeout, which is obviously an earthquake drill, at anacorteswa.gov slash prepare. And we encourage you to peruse those pages, learn about the threats facing Anacortes. We've provided a lot of very localized information. And let us know if you see anything missing. Let's update you on 12th and Commercial Avenue. So for this week, we've accomplished a lot from last week's disruption. The main portion of the signal pole foundations have been installed. As you might recall, we are installing new signaling equipment. So those go on new poles. This week, the crews will primarily work on electrical portion of the install, but I think we are still missing that critical component that actually controls the signals. There are no street closures planned, and there are no planned lane shifts until around September 8th, and that may change. Please remember you're in a construction zone, though, so drive carefully. Keep your wits about you. Open Streets is coming up this Sunday, August 30th, 11 a.m. downtown. Commercial Avenue from 3rd to 10th will be closed to traffic and open for families to meet on the street, bike, skate, walk. Please join us all down there. I will be at the Senior Center on Tuesday, September 8th at one o'clock for an informal conversation on any city topic. So feel free to drop into that conversation or go to my website at anacortesois.gov slash mayor and see the other opportunities you have to meet with me and chat about anything you would like. Our famous residential cleanup day is coming Saturday, September 19. It's at 9am at the city shop. So bring your residential garbage and yard waste at that time. Fidaugo Bay Day is Saturday, September 26th. You can enjoy a free, fun-filled day of learning with Discovery Stations, a touch tank, and plenty of kid-friendly crafts and activities. Big thanks to the Salish Sea School and also our Stormwater Division of Public Works for helping put this on this year. It is Saturday, September 26th from 11 to 3 p.m. at Fidaugo Bay Resort. And all of these events you can find on our website, anacorteswa.gov. Scroll to the bottom and click Calendar. All right, council, committee reports. Let's start with Parks and Rec Committee. Who would like that? And if there's nobody here from that one. Mr. Fantini, go ahead.

Strangely enough, we all three are here from the Parks and Rec Committee. Maybe only that. The Parks and Rec Committee met last Thursday. It was myself, Council Member Hunt, Council Member Young, as well as Parks staff. Just about all of leadership was there. We went over, we started by just going over kind of an update on some of the activities that that have taken place, kind of knowing what we've done through summer as well as spring and what's coming up through fall. We also got kind of an update on some ongoing activities. You know, youth soccer is gonna be kicking off here really soon. That's very exciting to watch them all go at it. Also talked about the summer day camps a bit. We also talked about the Senior Activity Center. Carl was there to give a bit of an update a little bit on the Meals on Wheels, and more about the community outreach, and also went over some of the projects and plans. There's a lot that has been completed this year in the Parks and Rec Department, some of which has led to revenue, which is great, like the columbariums, which We've all just recently been through, of course, the ACFL plan, the Maritime Plaza. They're getting ready to start construction on the Ben Root skate park, excuse me, the parking lot that's at the skate park. And then also in the planning phase for the Hart Lake shoreline restoration with construction, hopefully begin in 2027. And then, of course, we are in the planning phase still of the West End Park, but we do know there are budget constraints there. So again, that's just the planning phase there. Yeah, just a lot about that. It was interesting to hear kind of about all of the staff and how, you know, Parks and Rec, yeah, we have a lot of staff in Parks and Rec, but there's also a significant number of youth volunteers that help as well. But it's still a lot of work that is being covered through not as many hands. And so just a big shout out, because the parks still look amazing. And it's amazing what the staff has still been able to get accomplished, even with the budget restraints that we've had. So yeah, anything either? I mean, we're all through here. Anything that either of you would like to add?

Mayor Walters?

Mr. Young.

No, I think Mr. Fantini did an excellent job of encapsulating the conversation that we were having. The reality that we also have as we go forward into budget talks is really looking at what does it all mean And what I mean by that is having minimal staff being as resourceful as they have been in all of the projects that are working, whether it's the parks, whether that's events, whether that's whatever, but really taking a hard look. And that's what we will be doing in the coming weeks and months. And but, you know, again, we're so appreciative of the work that they do on our behalf as citizens, because, again, they are working minimally. and producing a lot with little. And, you know, that's the beauty of living in Anacortes. Thank you.

Thank you, Mr. Young. Let the record show that Ms. Moulton joined us at 6.14 p.m. Public Safety Committee. Who's got a report from that one?

Mayor Walters?

Ms. Hunt, go ahead.

Ms. Moulton and I met with Fire Chief McDonnell last Tuesday. Ms. Cleland-McGrath was away and Chief Floyd was down at the graduation ceremony for our newest officer who we've all just met, so wonderful. Chief McDonnell reported that the assistant fire chief position was set to close last Friday and it looks like that position has closed on the internet anyway. He also reported that job offers had been extended to one lateral paramedic and one lateral EMT, subject to background checks and that huge chain of events that happens after that. He outlined for us the sequence of training that's required to get new hires partner-ready to actually staff our fire and EMS apparatus, which I think, as we all know, is really an involved process. So we would like to get that underway as soon as we can. Chief McDonnell also discussed with us a proposed firefighting mutual aid agreement between Anacortes, the three fire districts adjacent to us, and three fire districts in the San Juan Islands. The city has long been party to mutual aid agreements with fire districts 11, 13, and 17, and those are still in place. But extending beyond Skagit County to the San Juan Islands would be a new thing for us. So a few of us on the committee had some questions about the language of the agreement. which we forwarded to Chief McDonald and to Ms. Swetnam. And so they're grabbing some more information for us. And I expect that that agreement will come back to us for consideration before long. And that's all I have. Ms. Moulton, did you have anything to add?

Thank you, Ms. Hunt. Our next item is the Personnel Committee Report. Who's got that one? Mayor Walters? Mr. Mantini.

Yeah, the Personnel Committee met on Tuesday, August 18th. It was Director Kendall Moyle, Council Members Moulton, Currier, myself. We talked about, we had some recruiting updates. We had some new hires. One police officer, two seasonal park maintenance, and then, excuse me, one... one new police officer one new seasonal park maintenance and one seasonal water distribution maintenance tech we did have two seasonal exits from parks as well right now we have um uh four unfilled fire positions one of which is the commun community mobile paramedic but i know we were all Pleased to hear that that's temporarily on hold due to it being covered by a light duty paramedic. So that's great there. Also, police has two unfilled positions still. Finance one, and they're still recruiting. They have some upcoming wellness events coming soon. August summer pet photo contest, September 22nd flu shot clinic for employees and family members, and then a November 2nd to the 20th household item drive for the Anacortes Family Center. Also, open enrollment is going on right now. And Director Moyle has, for the first time, moved from paper, has got us moved from paper enrollment to all online. So no more paper, which I'm sure with as many employees as the city has at times and as much paperwork as goes through, I can only imagine. So that go live is scheduled for October prior to open enrollment, and there'll be some great training for the staff and help for the staff on that as well. Police negotiations are ongoing. ERP Tyler HR payroll implementation. There's an October 12th kickoff meeting with a July 2027 anticipated go live event. Anything that you wanted to add, Ms. Moulton? That's it.

Mr. Fantini just mentioned a number of things the finance department is working on simultaneously right now, and that's all in addition to the budget. No, no, no, I'm just saying we are appreciative of Mr. Hoagland's and his team's work right now because there's a lot of it. Okay, so that concludes the committee reports. Are there any other council announcements at this point? Hearing none, we'll move on to our next item, which is public comment. If anyone would like to offer public comment at this point, raise your hand. Hearing none here, nobody online. Okay, we'll close public comment period and move on to the consent agenda. There are two items on the consent agenda, the minutes and the approval of claims. Mayor Walters. Ms. Hunt.

I move to approve the two items on the consent agenda.

Second.

motion and second to approve the consent agenda. No discussion is allowed on the consent agenda. If any counselor would like to pull an item, you could do so now. Hearing none, we'll proceed to a vote. All those in favor of the consent agenda say aye. All those opposed say no. The ayes have it, the consent agenda is approved. We have three items of other business tonight. The first is an interlocal agreement with Skagit County for grant funding for construction of our Port City event facility. Mr. Coleman will present this item.

Good evening council, mayors, mayor, members of the public. We've got a pretty straightforward and good project here. We applied for economic development money from the Skagit County. That's also known as the 0.09 money, 0.09 grants. And we requested $750,000 to fund the event facility at Cap Santa, which is the joint project between the city and the Port of Anacortes. And we did, I think you've already heard, we received the $750,000 grant award. So the way we accept this, because it's government to government money, we do this as an interlocal. So in front of you today is an interlocal agreement that we're requesting that the city council approve the mayor to sign so we can accept the $750,000 for construction of an event facility at Cap Santa Marina.

Thank you, Ms. Coleman. Council, any questions? Or motions?

Mayor Walters.

Ms. Moulton.

Thank you. I was able to attend the presentation to the county commissioners, and I thought it was excellent. And also, I really liked reading through our application that's here in the packet because I knew some of it, but I learned more. And so I would encourage anyone that has questions about the event center. to read through the application. It's actually pretty interesting too. It's not just a boring, long thing. It really tells about the economic development that it'll bring to the city and the port and everything that's done to get us as far as we are now and what we look forward to in the future with the completion of the event center. And it's pretty exciting. So it's worth reading if you're interested.

Thank you, Ms. Moulton. Ms. Hunt?

Thank you. I wanted to thank Mayor and his staff for making apparently a very compelling presentation and winning this funding, which is fantastic. There's a good case to be made. I'm wondering when we will have more of an update on timing for this project. And I know that we're approaching completion of the design. And I don't know what the bidding schedule is, because I do know that this funding is says that it's good through the 2027, but I'm not sure what the construction schedule is.

Yeah, October 5 is when we've scheduled a joint meeting with the port to hear an update on the event facility. And I think our schedule indicates that we would begin construction around the first of the year. And originally it was slated to take 14 months, and we currently think it would take around 12 months. So it would be completed close to the end of the year, probably not 100% by the end of the year, but very close to it.

Mayor Walters.

Mr. Mantini.

Yeah.

Oh, wait, I'm sorry. I should not have called on you because I had lined up Mr. Young.

Just kidding.

So if you'll yield for a moment, Mr. Young.

Thank you. No, you know, I find it quite interesting with the Economic Development Committee, you know, what we've been focusing on is looking not only in the immediate sense, but in the longer term sense about opportunities for our region and our area. And one of the things that sort of came out of my own personal research and meeting with various stakeholders just to sort of get their feel of what does it mean for us? Is it something that's economically viable and would benefit the city in the long term? One of the things that sort of came out of that discussion was that sometimes when we look at an entity, we look solely at that entity and whether or not those dollars are going to be at a level that we think we want. But the reality is the benefit to the whole area that comes as a result of that, meaning even if events are held at the event center space, the collateral benefit lifts all of us. What I mean by that is the port. What I mean by that is downtown shopping, the people, the whole feel of what we're having here. And I would hate to quote a number, but I'm going to be bold and do it anyway, right? But I understand that it's nearing well above $50, $60 million that comes out as a result. And so when we look at what does it mean for us, It means a lot because as we, the port moves forward with, you know, hoteling, you know, I think there's a request for a proposal out there and they've already had some immediate responses. So when we look at all of those things and the ability to attract people, stays, which helps LTAC, which helps all of us, and also the recruitment of people that, you know, may want to locate their business here. at least from an economic development standpoint, it is a viable positive, we just have to get to those points. And the last thing I'd say about it is, and I know that's not part of this, but I do think that we should continue to have conversations, further conversations and explore funding and other opportunities. There are a number of people I personally know in town that are looking to try to contribute something And they've been real donors for various projects throughout the city, kids, parks, whatever it is. And so they're there. And I'm just saying, I think that we need to look at it, given the budget that we have. And I think even at that, we could possibly look at even secondary committee's that may be formed in order to just explore. We can say yay or nay, or we can say we want to, or we don't. But I think our challenge is just to explore it and see what we can come up with. So we have nothing to lose. So anyway, I'm excited about it.

Thank you, Mr. Young. And yes, we are continuing to look for additional sources of funding. Ms. Fantini.

Thank you. So I think there's a lot of hard work that has been going on behind the scenes. And I know it's kind of been a little while since we've had a public update. And I go to just about every single event in the community, and I hear a lot of support for this idea, which is great. But I also hear a lot of questions about the project. So we live, I mean, we up here as a council, And we live in this all the time. And so we know how things are progressing. So I'm really excited to hear that we're going to have that update on October 5th. And I know the mayor mentioned to me, and I would encourage all of us to get any specific questions that we have about the event center, about funding, about whatever questions that people are coming up asking us. I think, you know, the mayor has expressed wanting to answer them. So get the questions so that the mayor and the event center team can bring us forward the best information to make the best educated decisions. So if there are questions that are still out there, sounds like now would be a great time before October 5th to get those to the mayor so he can answer them.

Thank you, Mr. Mantini.

Anyone else?

Any other discussion or questions?

Mayor Walters.

Ms. Kalina McGrath.

Thank you. I just wanted to say that thank you to the county for supporting this project. $750,000 is a large sum of money to commit to Anacortes, but also the fact that those dollars and this project does not... is not limited to the boundaries of Fidalgo Island or Anacortes. I think that when we look at events that happen in our community or in surrounding communities, we know that different events want to use different caterers. And those caterers come from Anacortes. They come from Mount Vernon. They come from Burlington. They come from Cedar Woolley. They come from LeConner. And I can think of a variety of businesses that will be able to expand and utilize this event facility because of the fact that it is a partnership between the port and the city and is not completely private with a private builder and a private caterer. That goes also beyond with uh the the decor it goes on with flowers it goes on with with um uh um you know what am i saying uh photography uh all of those things and and also not just events but um being able to support uh things that happen at the port uh when it comes to boat sales or big boating events or really recruiting as the Skagit Economic Tourism Group is trying to do and has really been built up in the last five or ten years. So I think this is a really awesome opportunity. I think that I agree with Ms. Moulton that the application has a lot of pertinent information. I think that our port city committee liaison committee that consists of Uh, Mr. Fantini and also who else? Mr. McDougall and myself along with the mayor has been able to be part of these discussions extensively. So I think we're all happy to answer questions and look forward to having that next update as to the process in early October. That being said, I move that city council authorized the mayor to execute the interlocal cooperative agreement C2026-0240 between the City of Anacortes and Skagit County.

Second.

Motion and a second to approve and execute the interlocal agreement. Any further discussion? Hearing none, we'll proceed to a vote. The vote is on the motion to approve the interlocal agreement. All those in favor say aye.

Aye.

All those opposed say no. The ayes have it. Interlocal agreement is approved. Thank you, council. Our next item is an overview of the city's budget process. And our finance director, Mr. Hoagland, will introduce this item. We are certainly planning to have a little bit more robust budget process this year. So we have developed the calendar early. added some additional sessions for Council to have more information and more discussion about the budget as we go through each of the pieces of it.

Thank you, Mayor, members of the Council, and members of the audience. So just a brief overview of the budget process tonight. What I really wanted to outline is to make sure it was clear just about everything that we do related to the budget is driven by state law. So I wanted to go through some of these milestones that most of council is familiar with. and just kind of outline the background of that. So under RCW Chapter 35A-33, that's where the entire Code City budget chapter lives. And as I said, virtually all milestones related to the budget are within this section. So some of the biggest milestones that we have that you'll see coming up soon, the revenue presentation is due by the first Monday in October, that's in Section 35A-33. A public hearing on consideration of a 1% property tax increase is required. That's in RCW Chapter 84. The mayor's budget message is required at least 60 days before the next fiscal year. That's also in 35A33. The council budget hearing, not the public hearing, but a council budget hearing is required. outlined in 35A33. So the difference there, well, just rounding this out, a public hearing is required on the budget in that same section, 35A33. So I think it's interesting to note that In the statute, it's required that the city has at least one budget hearing, which means a public meeting regarding the city's budget. And at that meeting, there's no requirement for the city council to take public comment. And that's why the statute does require the public hearing so there is at least one chance for the community to express their opinions on the budget. City of Anacortes, since I've been here, we have allowed public comment at virtually every public meeting that we have, and I don't see that ever changing, but I did want to point that out. So the budget process generally can be found under the city's new budget website. And this is really cool, and I would like to share that. But a couple of things you'll see, the budget process and calendar. We have historical budgets listed there, how the budget is organized, the description of revenues. There's just a variety of resources there that are really valuable. The last thing before I jump to that website, this is a list of all of our milestones related to the budget this year, starting with tonight, August 24th, budget process overview presentation to council. On September... We'll be bringing to council the city's budget policies, and then the rest of September kind of dedicated to the CFP capital facilities plan. And then in October, we'll get busy with the budget, and you can see a variety of meetings that are related to the 2027 budget. operating budget uh november a couple more budget meetings uh the public hearing scheduled for november 16th as well as cfp public hearing and then november 23rd That's another one of the statutory requirements. Council is required to meet to fix the final budget and then also adopt the final budget. So we have both of those scheduled for the same night on November 23rd. This year, November has five Mondays, so there is no meeting on November 30th. That November 23rd is the Monday before Thanksgiving. So we do have a bit of an aggressive schedule, but... I'm confident we can get done before Thanksgiving and then I'll enjoy our holiday season. So if you'll indulge me for just a moment, I did want to go to that budget website. So it's very simply anacortes.gov forward slash budget. You'll see here the 2027 proposed budget section. links into the budget process, the description, the RCW description we were just talking about. You can dig deeper into that budget process on these links, different steps that we're required to go through for that budget process, a list of our historical budgets here, so the last several budget books, and then in the archive even more budget information. The budget organization, I think this is really interesting. We've talked about fund accounting a number of times. very confusing not intuitive but i think this webpage does a nice job of explaining what fund accounting is particularly the general fund that's a term that most people have heard this website does a nice job of describing what the general fund is what resides within the general fund and you can see a variety of these services that live within the general fund in the cities City of Anacortes General Fund, these are the specific departments that live within the general fund and the associated department numbers. That also goes through special revenue funds, what a special revenue fund is and the numbering convention for those, what a debt service fund is and the numbering convention, capital project funds and the enterprise funds. So our utility funds, we have four utility funds and The utility funds are required to account using accrual accounting, sometimes referred to as full accrual accounting. And those are identified as enterprise funds. Our internal service fund is our equipment rental fund. That's also, it's a 500 level fund, but is also considered an enterprise fund. It's separated out from the other utility funds because all of the internal, all of the, Equipment rental customers are internal city customers. So that's why it's a 500 level fund versus 400 level fund. But it also uses full accrual accounting. Glossary of terms revenues. This is another really interesting section here. This 1, I'd really encourage anybody that has questions about property tax that all any of those major tax revenue streams that we have. to check this out because there's a lot of good information here. Down this section here under taxes, this is another one. Property taxes in Washington state are exceedingly complicated. And this webpage says, I think a great job of explaining how property taxes work. You can take a little bit deeper dive here. This link to learn how property tax works. There's an embedded video and a variety of other information related to property tax. There's also other, you can see other tax revenue streams listed there that you can take a deeper dive into. Sales tax, you can see it. How how comprehensive sales taxes in Washington state 8.9% here in the city of Anacortes, and you can see all these different categories that get a little slice of that 8.9%, including the city city gets actually. It's called the local share. There's 1% referred to as local share. That local share is split between the city and the county. Anyway, a lot of great information. I wanted to share that. I didn't want to take up a lot of time tonight, but I wanted to make sure this made sense to the council and the audience, and I'd be happy to answer any questions. Mayor Walters.

Mr. Young. Mr. Young.

No, I am impressed and at the risk of giving too many compliments tonight. It might be my last one, may not. I can't promise a single thing. But, you know, I think the city's effort to be transparent in allowing the taxpayer or the the people we serve as public servants to be able to see what's happening, understand the process and also question, you know, how those things are done. And I, I just, you know, wanted to commend, commend you, Mr. Hoglund, as well as Ms. Peck. And of course the mayor and team for putting this the way that you have. And as you, deep as it allows an explanation of how things are done. And it moves knowledge to a higher level that when those questions come forward, it allows the public to be able to research and be ready for whatever additional questions that they may have. So thank you for the depth of work that went into this. For me, it's illuminating, but I'm sure for the public as well, it's also illuminating.

thank you there's more to come as well uh we you know we want to provide that interactive view of revenues and expenditures um that we don't have yet but is supposedly coming as part of our eerp implementation um so when we have that available it'll be online uh mr hoagland you didn't talk much about the cfp but it does have a prominent position in the calendar do you want to give an overview of that really quickly maybe put the calendar back up on the 2027 tab

yes absolutely it's good good point mayor uh yeah so the cfp is um actually the first step in and an integral part of the city operating budget so capital facilities plan cfp stands for capital facilities plan is the capital element of the um Comprehensive plan? Thank you. Thank you so much. It's a comprehensive plan. Capital element of the comprehensive plan. It's a six-year planning budget. And the first year of that flows into the operating budget. So the COP for the budget year is 2027 through 2032. And 2027, obviously, those capital projects will be completed. illustrated in the operating budget when we when we get there. In fact, that process has started just, I guess last week, we started our internal department meetings with departments and the mayor to go through those projects. And we'll be bringing those here to council in less than a month now. So we'll have three, three meetings dedicated for that.

Mayor Walters. Mr. Fantini.

I just want to echo Mr. Young's comments. One about just how transparent this is. I can very easily plan now where I need to be. And what we're going to be talking about. I have a nice long, you know, that's great. So does the public, which I think is a very extremely important element. I know that we do a great job and I see a lot of opportunities on here for public engagement. I wonder though, if it would be helpful just to notice, because again, we all know these things because we're very clear on what a work session means and what this means. I just would be curious to just mark on there, not that I would suggest any change, but just mark on which meetings are actually available for public comment. and which meetings are just, you know, for the public to happen in public for them to see. Does that make sense?

It does. And I think from my point of view, I would trying to think of a time when i i wouldn't i would always um mark those budget meetings to have public comment i can't really think of a time where i would not sure um i think it's important that if the public has a question as we're going through this material and a question pops up and they want to you know they want to ask that question at the time it it would make sense to be able to allow that

And I totally agree. I think I'm specifically just looking at the things marked work session because work sessions, I believe, are very clearly defined in our council procedures. So I just want to make sure if we're putting those on there that they are open to public comment or if they're not, that we tell people they are. Yeah, absolutely.

We'll mark that on the agenda at that time, you bet.

Well, we might note on the calendar that the two public hearings are when we're really funneling people toward public comment as well. Or I guess three public hearings on two different dates. Because you'll note that some of these have the same date, same item on the same date.

Yeah. And the public hearings, we've always scheduled our budget hearings this way. We have the public hearings. pardon me, the public hearing at least a week before council meets to fix the final budget in case there are public comments about the budget that council wants to consider for edits to the budget before they fix and adopt that final budget.

So the next item is the budget policies September 8th and those are derived from the budget policies that have been in the budget books from year to year, but they generally haven't been considered for adoption by council separately from what just gets inserted into the budget book after adoption of the budget. So we're bringing those forward and they will get added to our Anacortes municipal policies. And we sent them off to the finance committee today so they can talk about them at their interim meeting. And then they'll appear before you at our next scheduled council meeting. So it'll be sort of a soft entry into the budget process. You'll note on the budget website pages there aren't any actual budget documents yet. We're still preparing those, and we'll be continuing to prepare those up until October 26 or so, which would be the mayor's budget message to council. You won't have a proposed budget until then. You will start seeing the CFP, though, in those first three meetings that are labeled there in September, and that will be on the CFP page on the website. So there will start being some real meat to chew on. Reminder that we are forecasting a $2.4 million budget gap between revenues and expenditures for next year. So we've got a bunch of... time in October, part of which is driven by the statute, to review revenues. And we'll need to, at the same time, be thinking about expenses, because how can you have one conversation without the other? But we'll be looking for that initial feedback, because that'll help shape the preliminary budget that you'll get at the end of October. And then you'll get to chew on it through November. Any other questions, comments, feedback?

Mayor Walters.

Ms. Kalina McGrath.

Thank you. You identified the concern that I wanted to state more clearly is the fact that revenue is not keeping up with expenditures for the upcoming year. For 2026, we had made some really challenging, difficult cuts, but we're able to balance the budget through the end of the year. but we are facing equally difficult challenges for 2027 and so providing the opportunity to educate and inform the public starting now at the end of august is valuable so thank you to staff and thank you to mayor walters for um getting this information out on our website and then also a calendar of events that allows us to stay informed because we are going to be relying on public input to make some really difficult decisions for our 2027 budget. And the more the public understands, the more that we understand, the better we can move forward with a cohesive plan that everyone can be satisfied with. So please, even if there isn't public comment being taken each week to week, I think it's valuable for the public to be informed and participating, whether it's at council meetings or following up with individually with council members and staff when things come, in front of us. So thank you.

Thank you, Ms. Cleon McGrath. Ms. Hunt?

I do just want to remind everyone that even before the budget process starts, your council members would love to hear from you. When you have revenue ideas, great, let us know. And when you have some priorities that you feel are absolutely the ones we can't touch, we all need to hear that from each of you, and not everybody will agree. But please don't wait until November to tell us what you think. Thank you.

There's a weighty responsibility in front of us. Certainly feel the heaviness of it every day. This item has an asterisk indicated and we'll take public comment on it. Does anyone like to offer public comment at this point? Ah, yes, come on up. Please come up to the podium, provide your name and the neighborhood in which you live and you have three minutes.

Hi, Janet Peergen, Ward 2. Is that good enough?

Yeah, yeah.

Okay. First of all, thank you, because I go cross-eyed with budgets, but I think I'm going to spend some time with this one. Love the pie charts. And then to what Councilwoman Hunt just said, how about putting a link for people who have ideas to just send them in?

Well, we can put a more explicit ask on the pages, but we do have Mr. Hoagland's contact information on there right now. So we'll add a more explicit ask. Anybody else? Yes, come on up.

Mark Neuhardt, Ward 2.

I really appreciate what you put together. That is so great to be able to have that much information available to the public. I would ask, as the Planning Commission has done a couple of times, is have some, let's call them open houses. And one would be maybe to be available, like the planning commission has been, not planning commission, but planning staff, actually in commission, to talk about the budget one-on-one with the constituents, with some council people there. Also a mid-level session that could talk about where the public could have direct input to the priorities, because I think Council Member Hunt just talked about that, and I've met with some of the council people. They want our input, but if we had an open house, again, similar to what city staff has done in council, and then before the The budget has finally finalized another open house to see how things came about. I appreciate the public hearings, but when we're in this kind of environment, you can't ask questions. I can tell you what I think, but there's no response. I know the mayor does a great job at meeting the public at the senior center, and we have some council people that are starting their own kind of meetings, but it would be nice to have kind of an open house, for lack of better things, to have discussions with council, with staff, to answer more complicated questions. This just isn't a good venue for trying to get public input and have a conversation, because there is no conversation, by design. So anyhow, if you consider that, I appreciate it. Thank you.

Thank you, Mr. Neihart. Mr. Wetter, come on up. While you're on your way up, we do have a loose format and have had some discussion about having an open house. We don't have it decided and scheduled yet.

As a member of the forest board, I'm often asked where individuals within the city can find a budget that represents the and in this budget, I assume is packaged into the parks packet. And. i wonder if there would be a clear way that that can be represented for the public including the administration of our two trust funds so that the public can refer to that in the budget document and not have to ask me to ask staff to make that clear because i'm sure staff has other more important things to do so i i assume that All of that will be bundled into and itemized in the parks budget within this budget. But I didn't see any representation of it within the budget topics. So thank you.

Thank you, Mr. Wetcher. Anyone else?

one online all right thank you this was just a presentation tonight obviously quite a bit more to come uh council if there's anything else we'll tell you mr i might be misremembering this but i'm curious because we're we're talking about like wanting to hear priorities i thought and maybe i'm getting this confused with part of the comp planning process but didn't a year or two ago we have something where it allowed people to pick what their budget priorities were. Wasn't there...

Yes, we did a survey that we will not be doing again. But...

Okay.

Well, I don't want to put my thumb on the scale too hard there. Surveys are not statistically valid, but the open house concept could fulfill that need while also providing education at the same time.

Bill Walters?

Mr. Young.

Would you elaborate just a little bit further to answer Mr. Fantini's question about the quality of what came out of the survey? Was it really useful in the sense that we had a smaller group of people with an idea of what should or should not be doing done versus, um, the actuality of what we were dealing with, you know, would you just elaborate a little bit more sentiment about that?

If you were, if you recall the survey and, uh, no offense to Mr. Hoagland, who was really excited about the survey, but, uh, you know, you put a little bit of information up like, well, what do you like? Do you like police? Sure. Everybody likes police, you know, like, Then what? How do you weigh those things? How do you compare them? You may think that, well, police are good, but we don't need this aspect of the service that that department provides or some other department. It just provides pretty limited information. And then of course the pool of respondents is not necessarily representative of the community at large. Sometimes people characterize it that way. I'm as a result, not a real big fan of surveys generally, but the open house format and other formats like that provides more interaction. So people can actually get questions answered. They can provide that feedback. And again, through some survey type mechanisms, But at the same time, you can have conversations with people, as Mr. Neihart pointed out. So I would be an advocate of that. If you want to have a discussion about a survey, I would not stop you from having a discussion about a survey.

Mayor Walters?

Mr. Fantini?

Do you think we can get an open house in this schedule? I mean, it's a pretty tight schedule.

I think it's a great idea. I think that is possible. Yeah. Maybe right around October 1 or somewhere.

Because Mayor Walters.

But we'll see. Because we haven't had a calendar in discussion about that. Ms. Hunt.

I was just going to say, an open house typically is not on the same night as the group, the commission, or the council meets. And so we can certainly squeeze it in some. Planning Commission meets Tuesdays now, right? So it's Wednesday or something.

Yeah.

Mayor Walters.

Ms. Cleland-McGrath.

Thank you. Looking back, I think we did that survey in May of 2024. And it was a community survey. It was like nine to 11 options. We were supposed to choose our top seven and rank them. They included pavement management, infrastructure, event center, library, park, senior center, fiscal planning for inflation, public safety, human services. But the challenge was, you know, The reality of our budget is most of it goes to our employees and compensation and benefits. And so I think that an open house where we actually have to realize and discuss the trade-offs of if we fund one thing, we can't fund the other thing is much more beneficial than just saying that we all love all of these items. We all would like to have unlimited funds. But the end product didn't really get further the discussion of how we better lead the finances of the city.

Thank you, Ms. Colleen McGrath. Anybody else at this point? All right. Anything else to wrap up, Mr. Odom?

No, that's it. Thank you so much.

All right, thank you. All right, we'll move on then to our final other business item, which is Lakeside Quarry Agreement. And our Parks Director, Mr. Lunsford, will introduce this item.

Good evening, Mayor, Council, members of the audience. So the city was approached by Lakeside Industries, but let's start with a map because maps are helpful. So if you can recognize where you live, the orange dot is the specific area we're talking about, city lands that was previously mined. Little more in depth map on the right hand side of the screen, you can see parcel 1906 that's the city on land. it's the area, the proposed modification so let's get into some business, you can see heart lake and the bright and lakeside industries property private property is to the north. So the city on parcel 1906 approximately 16 acres were mined under the 1999 agreement. Mining operations ceased in 2025. Lakeside industries approached the city about steps needed to possibly resume mining on this site. So the city is requiring, or through this modification, possibly requiring analysis of any impact to nearby wetlands before considering continuation of mining. So Lakeside came to us over time, asked us some questions about how this could happen. We've had various conversations with them. This modification as a result and the pieces in it are what we've decided upon presenting to you. So within the contract, you can see another map showing in more clear detail the area that was previously mined outlined in orange. If you are a Trail user, you'll see where my cursor is, Trail 212. And next to that is a wetland of concern that was outlined in the 1999 agreement for observation and the reason that the land was mined to the elevation it is today was to not impact that wetland. So no additional mining is authorized by the modification to this contract. Let's be perfectly clear about that. The modification does grant access to the property to begin the studies outlined in the modification. That's with city input and conversation throughout. It's not just a blank check. Allows for analysis of any potential impact to adjacent wetlands. Not only the one here, but any others on site that might be impacted. And allows for limited boring sites within the existing mining footprint within the orange. So that is so Lakeside can understand what is there. So the purpose of this is to continue this to 2028 to allow them to do this work. The reason why they want to move a little sooner is to take advantage of the rainy season. So they could then get their contractors on schedule. They could, if it was agreed upon by you, they could get their groundwater wells drilled and begin their analysis. That would probably take four seasons. So they could do that throughout the next 12 months, 12 to 14 months, whenever they start it. That is what I have for you in the modification. If there's any questions, I'm glad to answer.

Before you take questions, do you want to talk a little bit about the benefits of the city from the contract for the last couple decades? Could you repeat that, Mayor, one more time? How did the city benefit from the existing contract that is now proposed to be modified?

So the contract that was approved in 1999 allowed for approximately $1.... 1,250,000 plus or minus cubic yards to be removed at $1 a cubic yard. It started, then it went up with CPI. And so that brought in probably $1.5 million. And so with that $1.5 million, the city, with the help of the Friends of the Forest and the community, was able to buy two new parcels of land, what we would call the Van Buren-McLean property that was 40 acres off of Heartlake Road, if you're familiar with it. Let me just zoom back out. That's, oh, come on now. That's down just to the south of the orange dot. And then the ud property on the south face of Mount Erie, which is not in this image, was 20 acres that was added to the forest lands, which allows us to go around the south side of Mount Erie. So that's 60 acres plus minus that was added through this money. And then the treatment of Heart Lake for invasive milfoil and alum for the toxic blue-green algae. So those two are the largest ones. Also subsequent help with the budget when needed from quarry funds to allow us to do that work. So that was all from that arrangement. And that has real benefits to the city through acquiring more land and providing services on those lands. And also helping with some of our conservation easement fund expenditures to make it all legal and last for generations. Thank you, Mayor, for that prompt.

Thank you, Mr. Lunsford. Council, do you have any questions?

Mayor Walters?

Ms. Malte.

So I was looking at the unit payment in Section 3.01. where it says the city will be paid $1 per cubic yard and the unit price shall be adjusted January 1st each year. And I apologize for not asking that before tonight. Time sort of got away from me. But do we know roughly what that price would be now?

We've been investigating that. And so Mr. Hogan and I have had some discussions and some discussions with Lakeside. So I think that, you know, it could, it depends a lot on the quality of rock and what is there. So you could easily double it just to be consistent with the CPI that was at that time. You could also increase it further based on the rock that's there and the analysis of market value. So that'd be a question that we would have, I think, once this analysis was done, if that was your pleasure to approve that tonight.

Importantly, the contract from 1999 is more or less done. This only allows for the monitoring. If they wanted to pursue additional mining, we would sign a new contract. with a new price.

Right. So that's kind of, that's part of what I'm getting at. The clarification of these changes that were asked to consider that Lakeside may perform core samples to evaluate the remaining rock for further mining and may install and use groundwater test wells in the property to evaluate impacts of additional mining on adjacent wetland areas. So just to be clear for all of us, this is in order to determine if there is a potential for mining and if there would be impacts to the wetlands, presumably that's something that the city would not allow.

What I'm thinking is that this is simply to bring you more information. So I would say this modification is bringing you more information. So it's at Lakeside's risk to pay to do this, to bring you more information so that you can analyze that information and have discussion about it. So there's no, beyond the analysis, there's nothing that we're agreeing to in this modification.

Except for that they are allowed to do some testing.

Yeah, they're going to sample within the orange. So that's where the existing mine is at. So they'll be going through that gravel to bore down to test and see what is there. Is it quality rock that they have experienced throughout the rest of the mining process? Is it shale? Is it other things? So them to understand it, I think that that's fair for them to understand the market value of what they would be doing there. It's also good information for you to have for the future to understand what's there. And then analysis of the wetlands. They bring that information back to us and then give that to you for consideration, which is then at your pleasure to analyze and ask questions and request more information. That's all that we're doing tonight is doing that.

I just wanted to make sure that we're all clear on that, like why we're doing this.

Right.

We have clearly expressed to them that without information on the wetland, there is no possibility of a future mining contract.

I just want to underscore that. Thank you. No, thank you, Ms. Moulton.

Any other council questions?

No, thank you.

Mr. Young? I was just double-checking your line. Go ahead.

No, no, you know, I totally get it, and I appreciate the clarity with which you've enunciated the limits. And part of it is, you know, again, it does give us more information to determine where we are, what we want to do, if we want to be bothered, and then at what rate. And so, you know, if this isn't impactful it allows the council and the teams to look and see um you know just the 1999 agreement and the future agreement it just gives us that information and you know whether um I just think we just have to have that information. If the testing doesn't do any real damage at all to what we already have, it's just investigative, minimally so. You know, we've expanded the forest lands through those resources that's been able to come that the budget that we would have had to find money for, but the benefit and long-term benefit has been very clear. You know, we have an expansive, wonderful forest land. But what I appreciate, again, the last time I was giving out some appreciation, is the due diligence. that goes into assessing the value, what we have, its impact. We're not going in it with eyes closed. We're going in it eyes wide open and the tangible benefit to the population, to the forest land, preserving what we have for the future and in quality of life. And what we're generating is a beautiful thing. And I appreciate the additional thought that goes in it and the caution that goes in it and the willingness to bring to council all of the facts so we can make whatever determination we're going to make, but having all of the facts. I'm a big fan of all of the facts. So thank you. Thank you.

And thanks to Ms. Swetnam's office for their work on this.

Ms. Swetnam's office. Okay.

Thank you, Mr. Young. Ms. Hunt.

Mr. Lansford, it's also entirely possible that Lakeside may do their borings in the existing mine outline and discover that there's not really anything they want to mine there anymore. And end of story, they'll then do their restoration work through 2028 in case closed.

Correct. No, that's a great point. Thank you, Ms. Hunt. This just extends the contract so that if this doesn't lead to any further action by council or Lakeside, they need to do the reclamation that was part of the contract. And also part of that is to provide a 30-foot easement from the city property to have a cost road as part of the contract. So that's still just extending that deadline for that as well. Thank you for that.

This item is marked with an asterisk for public comment. Is there any member of the public who would like to comment at this time? Mr. Hubermans, come on up to the podium.

Good evening, Council, Mayor, and members of the audience. My name is Wim Hoopermans. I don't know my ward number, but Ms. Cleland McGrath represents me. We all know that the ACFL is a jewel. Now, think another 25 years from now, by that time, Traffic on Highway 20 will probably have tripled. North Whitby is congested. There might be a second bridge. But a thing like the ACFL will be priceless. It's not worth a million. It's worth way more. So if at all, just look at auto funding and keep it the best you can keep it. That's my words. Thank you.

Anybody else? All right. Oh, Mr. Wetcher.

Brian Wetcher, Anacortes. As a party to the original agreement, I would suggest that this is a wonderful arrangement going forward. What they are actually going to do is test the hydrology to see if it interferes with the nearby wetlands. I don't see that there can be any possible negative impact on the adjacent forest lands through this process. And I'm very familiar with the quarry, having worked in the quarry myself. I would suggest that Lakeside has been a wonderful partner and has lived up to the letter of their contract for the limit of their contract and has not only been of a great financial benefit to the city in tax revenues, but also in their trust fund for the ACFL. as well as they've been an extremely responsible land steward. I have been in the quarry and seen their work and seen them go above and beyond to make sure that they are complying with both mining regulations and protection under their contractual agreement of the adjacent forest lands and wetlands. So I urge you to support this so that the lakeside can go forward with deciding what they can do in the future. As we all know, mines eventually close. And the revenue that they brought to the city will eventually end. But I suggest that if it can continue in an environmentally responsible way, we should support that. Thank you.

Thank you, Mr. Wetcher. And for those of you watching at home, when we're talking about mining, we're not talking about gold or diamonds. It's gravel. All right. Oh, one more. Come on up.

Janet Parigen Ward, too. Just a question. And I know I'm getting ahead of where this is right now, but just do they do a lot of blasting when they do this mining?

Okay, thank you for your question. Yeah. Mr. Lunsford, do you happen to have answers to those questions?

uh rock extraction typically involves blasting coring and clear water i mean groundwater wells do not right yeah the proposed amendment is not for any mining but um

Yeah, and it's also adjacent to Lakeside's existing much larger pit.

Correct. So when we did the blasting of the previous elements of the contract, we would work with Lakeside to close trails as needed, given the safety issues that Mr. Butcher brought up. So we would work in the past coordinated with them for public safety.

All right. Counsel, do you have further questions, discussion, or motions?

Mr. Young. No, I saw Ms. Hunt about being in, so I will wait. Okay, I will recognize Mr. Young, though, because that... Well, I will approve modification 01 to the contract for removal of Quarry Rock.

Second.

There's a motion and a second to approve the modification with the lakeside contract. Any further discussion? Hearing none, we'll proceed to a vote. The motion is to approve the modification to the Lakeside Quarry Agreement. All those in favor say aye.

Aye.

Opposed say no. The ayes have it, and the contract modification is approved. We had scheduled a closed session on the agenda for our final item, but that turns out to not be ripe, so Instead, we have an executive session scheduled for potential real estate transaction as authorized by RCW 4230-110-1C. And we anticipate 20 minutes for that discussion. And we'll be back at 20 minutes or we'll extend it. Thank you.

The only one I guess on that now here is that. Yeah. Yeah. All right. I have 7.40 p.m. by my watch. It's about 20 minutes.