City Council - Regular Meeting

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Thank you. The City Council meeting of August 5th, 2026. As you can see, tonight's Council meeting is being held virtually. due to critical maintenance and upgrades underway in council chambers during the meeting we may take brief breaks as needed to address any technical issues and help ensure the meeting proceeds as smoothly as possible and council thank you so much please give me a little grace as we start out as i get the lay of the landscape here. I'm very appreciative to former Mayor Sweet having done this for quite a long time, but we'll get through it. So City Clerk, will you please call the roll?

Council Member Tim Chisholm.

Here.

Council Member Arnold.

Here.

Council Member Prem. Here. Council Member Falcone. Here. Council Member Paschall.

Here.

Deputy Mayor Black.

Here.

Mayor Curtis.

Here. All right. Our study session tonight is on two items. First, we'll have an update on the 2027-2028 utility rates. Second, we will have an update on the Kirkland Cares Low Income Support Program. We expect to reconvene our regular meeting at 7.30. City Manager.

Okay. Thank you, Madam Mayor. So we have the whole 90 minutes of the study session set out for these two topics, these related topics. I've asked everyone to keep their cameras off unless they're speaking. I wanted to give a huge thanks to folks at Public Works and Finance to put together a lot of really complicated information. And also our consultant team, who you're going to hear from, who has done a fabulous job. But it's all going to be led by Jenny Gauss, our Surface Water Strategic Advisor. And she has lots of help, people who will check in when needed. And Tracy Dunlap is also here, our Deputy City Manager, to chime in as needed where she is in the Tri-Cities. So with that, I will turn it over to Jenny.

Jenny Gauss- hey Thank you very much good evening Madam Mayor and members of the Council again i'm Jenny gals surface water strategic advisor and i'm managing the utility rate process for 2027 2028 and brooke is kindly running the slides for me for now. Jenny Gauss- Next slide. We have a very knowledgeable group of people, all of whom have helped to develop the budget assumptions and the models that are going to be used to update Kirkland's utility rates. The FCS team and myself will be the main presenters, but we do have many other folks standing by as questions arise. Next slide. And before we launch into sort of the meat of the presentation, wanted to just highlight some of the process improvements that have happened since the last rate setting process. We're doing more forecasting of revenues. Staff is reviewing and reporting on revenue trends each month so that we have the most up-to-date information. Water and sewer utilities have been split apart so that we could better see how each is faring financially. The utility policy supervisor is now allocated to water, sewer, and solid waste. And then we are really working on prioritizing water and sewer engineering and planning. And so those things are really going to help with the transparency and accountability in the process. Next slide. And so tonight is the first of three meetings where we're going to discuss utility rates updates. We'll be returning on September 15th with our proposed rates and again on October 20th with our final rates. Tonight we have our consultant team here to provide background on the rate models and to present the preliminary rates. These are rates that meet our current fiscal policies. We're also going to be discussing potential ways to moderate these rate increases, and we'll seek council guidance on the preferred rate scenario. A note that I have some slides available after Brooke's presentation. If there are questions, I have a set of slides that is available for us to use. Now, I'll introduce FCS's team. Brooke Teysha is a project manager with FCS, a Bowman company. She's been with FCS for over 10 years and has performed similar rate studies for many cities in the Pacific Northwest, and we're very pleased to have her managing the rate modeling efforts for Kirkland. With her tonight is Amanda Levine, who's managing the solid waste elements of the process, and likewise has performed many utility rate studies and engagements over her eight years with FCS. Together, they'll walk us through the preliminary rate study results. So take it away, Brooke. Thank you.

Perfect. All right. So thank you, Jenny. As mentioned, I'm Brooke Taisha with FCS, and I do have Amanda Levine with me as well as John Ghilarducci. And we're ready to just walk through those preliminary rates for the city's forecast as well as revenue requirements is what we'll refer to those as through the bulk of this presentation. So a quick agenda here to start. We're going to review a brief background. We're going to talk more about what a revenue requirement is. We'll review the city's fiscal policies, and then we'll talk through the revenue requirement results for each utility before wrapping it up with next steps and questions or discussion. so here again just a brief background for each of the utilities that we're going to discuss this evening first the water utility the infrastructure associated with the water utility is operated and maintained by the city the city purchases their water supply through cascade water alliance similarly for the wastewater utility the city operates and maintains the collection system and uses that system to send wastewater to king county's treatment plants who they pay for treatment services On the surface water side, the city operates and maintains the surface water system, working to reduce street flooding and address the health of local water bodies. Surface water is unique in that it gets billed through the county's property taxes, so most customers don't see the bill as directly. And then finally, the city also provides garbage recycling and compost curbside collection services through waste management, which is also a contractor. And they pay disposal costs to King County for disposal service as well. So for tonight's review, we're going to be concentrating on the revenue requirement for each utility. When we talk about a revenue requirement, our goal is to determine the overall amount of revenue needed to satisfy all of the fiscal obligations of each utility on a standalone basis. Our fiscal obligations include our direct expenses, so those are things like our operating and maintenance costs, any existing debt service payments, and any new debt service payments or rate-funded capital that's needed to fund the capital program. Those financial obligations also include indirect expenses. Those are things like maintaining our reserve balances as well as debt service coverage ratios if we're a utility that has a large amount of debt. The city of Kirkland is not within their utilities currently. For this exercise, we compare a forecast of those obligations to our revenues at their existing levels first to determine whether those revenues are sufficient over the forecast period. And if we see a forecasted deficiency throughout that study period, we can develop a rate plan to help satisfy that deficiency while ideally trying to minimize impacts to customers to the extent possible. And that's going to be our main concentration tonight, revenue requirements for each utility over a multi-year period. Or in other words, how much do we need to potentially raise our rates over that timeframe? So before we dive into the results, we want to set the stage first with a review of the city's financial policies. These policies provide some guardrails for the study to help encourage consistent decision-making over time, especially when we have documented fiscal policies like the city does. Those allow for consistency even as staff and leadership changes. So first here we have our working capital contingency, which is in place to allow the utility to weather those day-to-day cash flow fluctuations. The target is 45 days of O&M for water and sewer. It's 100 days of O&M for stormwater and 30 days for solid waste. We do see a higher target for stormwater here because it's billed through those property taxes again and has two larger influx of revenues rather than more of a steady monthly stream. The water and sewer utilities also have another operating contingency layer. It's for a similar purpose to help weather those cash flow fluctuations. This results in an additional 12% of O&M held as a reserve target. Together, that's just about 90 days. The water, sewer, and surface water utilities also have capital contingency targets to provide a source of funding for emergency repairs or capital cost overruns. In each case, that target is about 10% of the six-year CIP program. And then finally, the water, sewer, and surface water utilities also aim to fund a dedicated amount of capital investment directly from rates to treat that infrastructure investment like a true cost of operating those utilities. Water will seek to fund 125% of annual depreciation costs through rates, Sewer will aim to fund 165% of depreciation costs and surface water will seek to fund 100% of depreciation. The system investment policy really helps to ensure that we're replacing system infrastructure as we're using it. A solid waste doesn't have those added capital contingency or system reinvestment components since the utilities largely contractual costs rather than that direct infrastructure investment. Yeah, go ahead. I see a question, or a hand raised.

A hand raised. Just wanted to make a comment to the council that there's a lot of information that could be presented. But please, if you have a question during the presentation, please feel free to raise your hand and ask it as we're going.

I see another one.

Jay? Thank you, Kurt, and thank you, Brooke. I'm wondering if you could talk a little bit about why sewer and water have different depreciation numbers, because it seems like that infrastructure would be similar to me. And if we don't have that information, it would be something that I would like some follow-up off on. Thank you.

Looks like Tracy will weigh in on that first, perhaps.

You're on, yeah. Thank you, sorry, hope my connection's okay. A really quick answer is that the sewer utility assets were put in place over a much longer period of time. The water utility assets were put in place over a much longer period of time. Sewer only became a required, service really in sort of the 50s and 60s, where the water utility was built all the way back, starting at the turn of the century. And so the sewer assets are actually more concentrated in terms of when they reach their age. And the other thing I just wanted to say quickly about this minimum amount of investment is this is just trying to recognize that the replacements are going to ebb and flow over time. They'll be bigger in some years, smaller in others, but this is a minimum amount to at least recognize an expected failure rate with the actual projects prioritized as part of the system plan, the actual replacements. But it really has to do with the fact that the sewer assets were added in a much more concentrated time period. Before that, at best, it was going into septic systems. Before that, it was just going where it went naturally.

Thank you, Tracy.

Go ahead, Brooke. Perfect, thank you.

OK, so we're going to move on now to our first set of revenue requirement results and concentrating here on the water utility. In order to build the financial forecast, we have to include a few assumptions. First, we'll concentrate on the 2026 to 2032 timeframe as that results study period, with 2027 to 2028 as the identified rate setting timeframe. For the water utility, the combined reserve target is $7.2 million in 2027, and that includes both the operating and working capital reserves, as well as the capital contingency. For rate revenue projections, we did work with the city to look back historically at revenue performance and the associated heat and precipitation data to try to ensure that we're forecasting revenues on a normalized usage year. 2025 was a more normalized usage year, and our 26 budgeted revenue is in alignment with growth assumptions plus actual performance. Forecasting future revenues assumes a 0.9% growth rate on average, and it also assumes that the Kirkland Cares program participation increases by 10% per year as more customers join that program. on the expense side of things the city's 2026 to 2028 budgets provide the baseline for expense forecasting increasing into the future with inflationary assumptions cost inflation varies by expense type between 2.5 to 5.5 percent for many of the internal expenses Total costs increased by about 5.7 on average, which is really driven largely by those Cascade Water Alliance increases that range from 4.9 to 12.8% depending on the year. Cascade Water Alliance makes up about 38% of overall water utility costs in 2026. That share is projected to increase to 43% by 2032 as their increases outpace those internal city costs. And then finally here, we are anticipating that the water utility will need a new bond to help fund the capital program and are forecasting that debt to be a revenue bond with a 20-year term, a 5% interest rate, and a 1% issuance cost. The total capital plan for the water utility is $42 million over the next six years. So here, just taking a closer look at the, yeah.

Sorry, before you go on, question on the previous slide. Sure. So when you talk about customer growth, and this is my question is on all utilities, is the 0.9% per year, is that an industry standard? And my question really is, is that anticipated growth based on our comprehensive plan and our

cpps or is that just a general growth number so it's certainly it's not necessarily industry standard and it's much more tailored to the city of kirkland and staff did take a look recently on number of new connections as well as some near-term history on that typically we don't always align from a rate setting perspective with comprehensive plans because those can typically be a little bit more robust in their growth assumptions because engineers have a different reason for looking at growth. They want to be a little bit more robust. They don't want to dig up the street more than once, to give an example there. So when we're working through growth on the rate setting side of things, we like to look at some near-term actuals. Sometimes we'll look at some connection charge revenues to give us a good idea of the number of connections we've been seeing over the last year or two and try to base it more on that.

That's helpful that just it's based on Kirkland, not an industry stand.

Absolutely, yeah.

Thank you.

So here, just taking a closer look at the water utility components, we have $17.2 million in rate revenue growing to about $18 million with that customer growth element by 2032. Those revenues are in support of O&M expenses that range from $15.2 million to $20.8 million with inflation. annual system reinvestment targets increasing from 2.3 million to 3.1 million existing debt service is just over 100 000 annually for the utility and i believe that'll be fully repaid by 2033 and then we are uh assuming some future debt service totaling about 1.1 million once the 12.5 million dollar revenue bond is issued to help fund the city's south reserve replacement project in 2026 and 27. The total $42 million in capital costs is funded by a mix of direct rate funding at 51%, 30% from the $12.5 million revenue bond. CFC revenues make up about 19%, and then we just have a small amount of developer contributions, about $200,000 to round out that capital funding pie there. So in this graph here, we're going to pull together all of the direct obligations of the water utility in the bars. The dark blue are the internal O&M expenses. The light blue bar represents our Cascade Water Alliance expenses. Navy blue are the Cascade Water Alliance membership dues. And then we see the green bar is our direct refunded capital, with the yellow bar first appearing in 2027 as the additional debt service. If we compare those forecasted costs to our revenues at existing rates, we see that we're just meeting obligations in 2026, maybe a slight sufficiency there. However, as we're moving into 27 and beyond, we would become deficient to fund our rate-funded capital in 2027, and we would not be sufficient to cover our new debt service by 2029, and eventually our water purchase costs as we continue through the study period. So in order to satisfy that deficiency, we're looking at an 8.5% rate increase in 2027, followed by 6.5% from 2028 to 2030, dropping to about 5.5% through 2032. This rate strategy results in a single family bill impact of approximately $4.81 in 2027 and just under $4 in 2028. The somewhat front loaded rate strategy would allow the water utility to satisfy the operating and capital contingency targets in all years of the study period. Which is shown in this graph here. So with the proposed strategy in place, we would meet our target beginning in 2027 on the operating side and stay at that target through 2032. On the capital reserve side, our use of debt and the continued commitment to fund our system reinvestment target allows the reserves to build in preparation for some of those unknown capital infrastructure needs that are going to be coming from the soon-to-be-completed water system plan. The orange line on these graphs is shown to illustrate the effects of the fund balance if we were to hold our rates at their existing levels. So as we saw in the revenue requirement graph, that would result in forecasted deficiencies that would ultimately deplete reserves on both the operating and eventually the capital side.

Let's pause for a second. I'll see if anybody has any questions. Absolutely.

if not a quick water drink. Okay, there we go.

Council Mayor Prim.

Yeah, I wanted to actually, I apologize, I should have asked this question earlier, but I think it was two slides ago where you talk about the maintenance and the, yeah, this one here, the O&Ms. Can you just maybe, because it looks like that's one of the, you know, it is the largest expense that we have. So can you just walk us through very briefly, like,

Is that an increase in these types of expenses as compared to prior years?

What is the primary driver?

So yeah, when we look at this particular O&M expense line going from $15.2 to $20.8 million, this is both a combination of the city's internal budget, so that's their personnel, their benefits, all of the services that they provide internally. It also includes the Cascade Water Alliance components. So on the internal side, I'm going to flip back here for just a second so we can talk about the expense inflation. Internally, salaries, benefits, all of those expenses that the city is in charge of or can control are increasing by between 2.5 to 5.5%. And we'll typically see the higher increases related to things like benefit costs because that's what we've seen in the industry just in real life. real terms, real increases there. What we see as a bigger driver though really is those the Cascade Water Alliance increases and they become a larger proportional share over this time frame and are driving up those O&M costs closer to that six percent over time. So it is a combination of internal and external, yeah.

Anyone else? Okay, go ahead.

All right. So as we move into our discussion here for the sewer utility, we're gonna see a similar layout to these slides and materials with similar topics that we'll talk about for each. So similar time frame for each utility, we're going to concentrate on 2026 to 2032 study period with the 27 to 28 concentration for rate setting. For the sewer utility, the combined operating capital reserve targets total just under $8 million in 2027. And similarly, for revenue forecasting purposes, oh, do we have a hand or was that an?

I think that was a residual hand. Sorry. Sounds very prem.

Perfect, thank you. For revenue forecasting purposes, again here, we did base the 2026 forecast off of 25 actuals plus growth, and again 25 being a more normalized historical year there. And here we're assuming average system growth of about 0.7% annually. Just like water, we assumed that the Kirkland Cares participation would also increase by 10% per year as more customers took advantage of that program. On the expense side of things, again, we're utilizing the city's 2026 to 2028 budget as the baseline and adding inflation to those future years. Those internal costs will inflate by between two and a half to five and a half percent, really depending on, again, that expense type. Overall, O&M is increasing by 10.7% annually. And again, this is really driven by external factors related to King County treatment rate increases that range from 11.25 to 12.75% annually. Like we saw on water, King County is becoming a larger share of utility expenses over time, starting at 44% of total costs in 2026, projected to increase to 56% of total sewer utility costs by 2032. No new debt is forecast to fund the total capital program of about $31.1 million in escalated project costs on the sewer utility side. so again here we're going to take a closer look at the key components for sewer we show existing revenue of 20.9 million growing to 30.8 million by 2032 again just with that growth assumption those revenues are in support of o m expenses of 18.1 million and 26 increasing to 33.3 million and again this is one of those areas that's largely driven by those external king county treatment expenses System reinvestment for sewer starts at $3.9 million in 2026, increasing to $4.8 by 2032. And pretty similar with water, existing debt service is just over $100,000 annually. For the sewer utility, we don't have any new future debt service to fund the capital plan. And that total of about $31.1 million in capital projects is planned to be funded through direct rate funded capital of about 82% and about 18% from CFCs. We have just about $100,000 planned from developer contributions there. So the bulk is really rate and CFC funded. Okay, so bringing together the direct obligations for the sewer utility here, the bars are representing those obligations with the dark blue bar being our internal city O&M expenses. The light blue are King County wastewater treatment charges, followed by rate-funded capital in the green bar. So, what we see here when we compare our forecasted obligations to our revenues at existing rates is that we're forecasting a deficiency in 2026. In order to fund our full rate-funded system reinvestment target of 165% of depreciation, we will need to utilize operating reserves. Moving forward, without any rate action, which is noted by that solid black bar in the graph, we'd be deficient to fund our rate-funded system reinvestment fully by 2028, and we wouldn't be able to fund our King County treatment charges by the 2029 or 2030 timeframe, at least in full. So in order to correct the deficiency in 2027, while maintaining our rate-funded system reinvestment at the 165% of depreciation, as well as maintaining the operating reserve at a minimum of $2 million, the sewer utility is looking at a 19.5% increase in 2027, followed by about 8.95% annually thereafter. The typical single family customer would see an increase of $16.25 a month from this change in 2027, followed by a monthly increase of about $13.37 in 2028. It should be noted here that a single family store customer will see the King County portion of their bill directly passed through, which is a large rate driver, especially in 2028 and beyond.

Right, let's hang on.

I was going to wrap it up real quick and then I'll pause. But here just taking a look at the operating and the capital reserves for the sewer utility. We are starting 2026 below target on the operating fund. The rate strategy that we're proposing does not immediately correct the fund balance deficiency and instead slowly grows the reserve back to target through 2032. The upfront rate increase proposed would keep the reserve above $2 million in 2027 and correct the initial cash flow deficiency while still funding refunded system reinvestment at those target levels. On the capital side, we see balances ending 2026 at just above $10 million. That reserve would grow with continued rate funding ending 2032 at about 15.5 million. Similar to water, again, with upcoming system plan needs, it can be prudent to maintain those reserve balances in preparation for some of those unknown costs. Happy to pause.

Thank you, Brooke. Council, any questions? OK, we'll go ahead.

all right all right so next we're going to review preliminary surface water outcomes and again very similar layout we're going to show you results through 2032 with the rate setting period concentrating on 2027 and 2028. the 100-day onm target plus the 10 of the cip results in a six million dollar combined reserve target in 2027 for surface water And here we typically, again, see more steady revenues, but we reviewed the forecast with that same thought process for forecasting our revenues. So determining whether our 2026 budget was in alignment with a forecast of 25 actuals plus growth and any associated rate increase. Stormwater utility growth averages about a half a percent annually, and it also represents a senior discount participation rate growing at about 10% annually, which is administered by the county. For expense, forecasting will rely again on the city's 2026 to 2028 budgets plus inflation. Inflation varies here for surface water between the 2.5 to 5.5% depending on the type of expense. And then overall operating expenses are increasing just under 3% in the forecast because there really are no external cost drivers for the surface water utility to be perhaps pushing that up. We are also not forecasting any new debt for the surface water utility at this point to help fund that $31.7 million capital plan through 2032. So looking at the key components here for surface water, we have about $14 million in existing rate revenues, growing to $14.2 million with customer growth. That is in support of O&M expenses that range from $12.8 million to $15.2 million. System reinvestment funding of $3.1 million, increasing to $3.6 million. And then the stormwater utility currently has no existing debt and no future forecasted debt to fund the capital program. a direct rate funded capital is anticipated to fund 77 of the capital program with 16 coming from external funding that external funding is made up of a department of ecology forgivable loan as well as some developer developer contributions and then finally we've got cfc revenue that's going to make up the remaining seven percent of our our funding needs for stormwater So here again in our revenue requirement forecast, we see those blue bars representing our O&M expenses and then the green bar here showing direct rate-funded capital. Comparing those obligations to existing revenues in 2026, we see the surface water utility is also forecast to be deficient to fully cover the 100% depreciation target for rate-funded capital. In order to fund the full targeted amount, the utility would need to rely a bit on reserves. Moving forward, if no rate action is taken, the utility would fall short to providing any rate-funded capital by 2029 and would eventually not be able to cover their total O&M expenses in the future. So in order to satisfy that deficiency, we're looking at 7.15% increases from 2027 through 2029 before dropping to 2.75% thereafter. This strategy is set with the intent to resolve the cash flow deficiency by 2029 and utilize available fund balance to do so. A 7.15% increase results in an increase of between $1.65 and $1.77 a month in 2027 and 2028 for a typical single family customer. And again, these rates are on property taxes, so have a little bit less visibility than some of our water, sewer, or solid waste rates. Finally here, looking at fund balances for the stormwater utility, we do see on the operating side that we have available fund balance in 2026 that allows us to phase in the rate increase and weather the cash flow deficiency over a three-year period. So here, fund balance is meet or slightly exceed the operating target in all years of the forecast period with this rate strategy in place. The capital fund will see growth in reserves as the city continues to fund the full rate funded system reinvestment target, growing until 2031 when the city has a larger capital expenditure and the reserve will fall, but will never fall below the target. We'll pause here for just a second before I hand it to Amanda.

All right, I see no questions. Yeah, go ahead.

Okay, perfect. I will pass it to Amanda to walk through the solid waste discussion. And you'll notice a lot of consistency with these slides as well. So go ahead, Amanda.

Great. Thank you, Brooke. Can you all hear me okay? Okay, perfect. And as we went through the slides before, just feel free to chime in if there are any questions that come up on the solid waste utility. So right now we're looking at the similar screen that we saw for the other utilities with our study data assumptions here. Our period for the study is going to be that 2026 to 2032 timeframe. And we're looking at meeting the specific solid waste reserve target of 3 million in 2027. This equates to about 30 days of operating expenses for the utility. With that customer growth, So we're looking at an average of 0.6 in customer growth from that timeframe moving on. That's an average looking at different kinds of customer classes like residential, commercial, multifamily. And then we're looking at an annual rate revenue of about $32.3 million in 2026, which we will need rate increases to keep pace with the expense inflation that's happening, as you can see in the dark green box. So as Brooke mentioned earlier, we have internal costs that are increasing. from about 2.5 to 5.5% each year, but there are also contractual costs like the waste management contract and other King County disposal items that are increasing at a higher rate than some of those internal factors. And just to touch on the makeup of those O&M expenses, about 75% of the budget for the solid waste utility are those contractual costs. So that becomes a really big portion of the expenses that need to be covered. Because of those large contractual costs, there are no city-specific CIP items, and there's no new debt for the utility either. So on the next slide, we can look at a slightly condensed version of that revenue requirement summary. As there are no capital costs, the system reinvestment and debt aren't a huge portion or a part at all of the solid waste utility. So you can see in the first box there in 2026, We have our cash operating expenses in the blue, our waste management charges in that teal blue, and then King County charges in the more greenish teal color. So really the majority of those costs are based on contract kind of outside sources. In 2027, the utility requires a 6.75 rate increase to be able to meet that specific target outlined in the previous slide. So right now, there is a slight deficiency in what is being kept in the solid waste utilities fund balance. And so that 6.5% writes that fund balance within the first year. Past 2027, the utility can keep a 3.95% rate increase in order to meet those contractual needs over the forecast period, but also anticipating that on a longer scale, we're going to try to meet that 30-day fund balance until 2042, I believe, or 2045, actually. So if we go to that next slide,

Let me get a question real quick.

Oh, yeah.

Council Member Prem, go ahead. Shilpa? There you go. Council Member Prem, go ahead.

I'm just looking at the game.

Can you hear me? You're breaking up. I think she's frozen. Can you hear me? Yes, go ahead.

So I was just looking back at the O&M expenses again, and I just wanted to understand, like, the King County... And that's through 2030. Or like, like, I guess that's one question. Like, how is that broken up? And then rate increases already.

Council Mayor Prim, you're you're breaking up and we're having trouble. Why don't you try to turn off your video and see if that helps? Try it again. No, we're having trouble hearing you. Okay.

No. No worries. I'll ask it at a later time.

Thank you. Anyone else have questions? Okay. Go ahead, Amanda.

Okay, thank you. And I will maybe try to anticipate what that was kind of asking about the King County disposal. That portion, even though our forecast is going out till 2032, we are continuing those costs throughout the full forecast as well. So those aren't just till 2032. So on this slide, Below the graph, we have an example bill for the 35-gallon bin, and this is going to change by about $3 in 2027 with that 6.75 rate increase, and then about an average of $2.30 beyond that, looking at 2029. So if we go to the next slide and take a look at the fund balance assessment. So right now in 2026, we see that blue bar, which is below the 30 days of O&M expenses. In 2027, we see that blue bar actually hit the black dotted line, which means that the 6.7% is getting us to meet that target reserve. We do exceed those 30 days once we get to the mid part of our forecast, but we are also anticipating a planned contractual renegotiation in 2032 and want to keep that in mind and keep our rate increases having us at least meet our operating target through the end of the full forecast. So the solid waste utility takes a little bit more of a long-term look because of the nature of those contracts than maybe water, sewer or storm does when we're thinking about those rate increases. For the 30 days as well, this is something that, you know, as Brooke explained in those previous slides, we are trying to get to a not first year. So that really is what the 6.75 is going towards, not 30 days of operating. Right, and I will wrap up the solid waste discussion there if there are any other questions on this utility.

Council, any questions? All right, go ahead.

All right. So just in conclusion here, thanks, Amanda, for that piece. We're going to bring back the combined bill summary here across the four preliminary rate strategies that you saw today, inclusive of taxes and other fees. A typical single-family customer would see an impact of approximately $29.10 a month across all four utilities in 2027. That impact would decrease to about $23.65 a month in 2028. projected rate impacts are forecasted through 2032 but just as a reminder we're really concentrating on the rate setting period of 2027 and 2028 at this point And then finally, while we showed you all a set of preliminary rate and capital funding strategies for each of the utilities tonight, we are working with city staff on additional rate scenarios that could include the following adjustments or levers, if you will. So first of all, we will bring back scenarios that include service package expenses to show their impacts on the rate strategies. In order to mitigate some upfront rate increases, we could look at meeting reserve targets by 2032 instead of immediately in 2027 for water, surface water and solid waste. And primarily for sewer, we could look to reduce our system reinvestment funding contributions for a period of time to help mitigate those rate increases that are related to that fund balance recovery.

the second two levers with guidance from council could help to ease those near-term rate pressures yes i see a question uh council member arnold uh thank you i look forward to seeing some of these options when you're looking at reserve targets can we get multiple options for replenishment um For some, I'm curious about what are the impacts if we close over a biennium or two instead of all the way out to 2032 and may want to look at options that treat different utilities differently.

Absolutely.

Council Member Paschall.

Thank you. Question or and a couple of comments. One is it's really I really like the table at the beginning of the memo that kind of shows all the rate increases over the next six years for each of the individual utilities by percentage. Could you when when you come back could you just have an overall percentage increase by year when you look at all of them together. Sure. That would be helpful. And then my second comment is, I'd love to hear someone disagree with this, but it feels like these rate increases are going to be really impactful, really impacting cost of living, affordability, you name it. I know that, I know that everyone's concerned about that, uh, generally. Um, but we tend to kind of compartmentalize things and say, Oh, well it's because of this little thing here and then this thing over here and then this right over here and this agency over here. And, and then it, it comes across as like we kind of shrug our shoulders and go up, there's nothing we can do. And then we just move forward. And, um, I guess I want to challenge that kind of thinking. And I know that we've had conversations, regional rate conversation. I know that we talked about this individually for the different utilities. I'm asking for probably something that's impossible, but just more emphasis on what can we do? What is in our purview that actually can have meaningful change? What's the... What's the least bad option? So that's just something that's on my mind. It's a frustration of mine. I'm sure it's frustration of others as well. That's like, I feel powerless. Thank you.

Thank you. City Manager.

Yeah, so I think we all share that concern that these rates are going up and the totality of them is not sustainable. one of the reasons behind kirkland really pushing for the regional rate summits was you know you take this and you also add on top of it puget sound energy right and it's just not something that could be sustained so in the first summit what we learned was that a big chunk of the increases across all utilities was regulatory and so to your point about challenging assumptions it's hard for us particularly in the pacific northwest to think about Would you defer some environmental regulations? Would you defer some climate commitments in order to save rate impacts, right? So those are the kinds of things that need to happen at the regional level, and we've been really pushing this new county executive to take out those affordability summits, because across all of them, King County is a major player here, and so is Puget Sound Energy. So that's one way I think we're gonna keep trying, and then we're looking very hard at everything we can do on the Kirkland side have to keep our own costs down as well. So we definitely don't want to shrug and we definitely are doing what we can to try to find a path forward here. Thank you for that comment.

Deputy Mayor.

Thank you, Mayor. And thank you, City Manager, for reminding us about Kirkland's efforts on the regional utility summit. I'm looking forward to the second summit and whether we can start making. More progress towards some concrete proposals from the larger group. I share the concern that customer Pascal raised. I think we all do. Acute concern. Which is why you know to put it, I think. To kind of add a plus one to account for Pascal. Everything that is in our control. One thing I appreciated was already in the proposals and the discussion are some suggestions for how to smooth the rate increase. I just want to emphasize whatever's within our control, setting the regional rate summit aside and some of the strategies that may come out of that. Whatever is in our control, I want us to bring all that to bear, and I appreciate the staff's initiative already in identifying some of those things. But again, if it's in our control, I'd like to see it as part of our proposal, at least to understand what it would mean and what its impact would be. So I just want to add my voice to that. Thanks.

Thank you. Council Member Prim, welcome back. Okay, let's see if this works. I hope you can hear me. Okay, perfect.

So I completely echo what others have said regarding just how impactful these rate increases potentially can be if they continue to be those rates in the future. And I think I'd just like to understand kind of what is our primary mechanism to now, now that we know what is going to be kind of the input into these potentially increases in rates. What are our next steps to, I don't know, assign individuals within the city to say, all right, you go and, you know, you're gonna go and work on kind of these regional efforts, and then you are gonna go work on potentially looking into our internal mechanisms on how to reduce these rates. I guess, what is our overall strategy on steps forward to kind of get this done?

City Manager?

Thank you. I was looking for my hand raised, but no. So it's going to play out across a variety of different discussions with the council and different city strategies. So in the council's budget process, you're going to hear a lot more about the capital projects and the rates and the overall city budget. And we'll talk about some of those things. So some of the things we're looking at, for example, the council did give us permission to bring on some additional staffing to work, particularly with the Cascade Water Alliance and the regional wastewater discussions that are going on. and right now we've been committing across all levels so i've been very involved in these discussions the mayor has been very involved these discussions uh council member arnold the deputy mayor black have been involved and obviously uh councilman pascal is our representative on the cascade waterline so i think we've been trying to press at every level to how city of kirkland can bring different analysis different thinking to sort of challenge people's assumption and try to lower some of the costs So we're going to be working at the state level, too. We've had in our work program last time that anything that comes out of these summits or ideas is something that we want to be taking to the state level. And so right now, it's still a big push uphill because these are decades in the making, a lot of these decisions, particularly at the regional levels. And it's hard to get everyone to challenge their thinking in the short term as this has all kind of sprung upon us. As Jenny outlined at the very beginning, we're really trying to change our thinking about our own rates and trying to make process improvements like splitting our water and sewer rates out. For decades, we haven't done that. So that's an example of doing better at different analysis of the rates, tracking our revenues more carefully, looking carefully at our costs, looking carefully at our labor costs and other costs. So there's probably nowhere in the government that we're not looking hard at this and trying to come up with creative ways to break the rates down and to convince the region to help break rates down as well.

Much more to come on this.

And I would just add Councilmember Prim and your Public Issues Committee is another place too to advocate what we can do regionally on affordability. Councilmember Arnold, did I see your hand up?

You did, but City Manager covered what I was going to say about the regional representation by Councilmember Pascal at Cascade, myself at the Solid Waste Working Group and Capsule Program at Sound Cities. Thanks.

Thank you. Deputy Mayor?

Good segue. All I was going to do is add I'm thankful for the appointment to the Association of Washington City's Legislative Priorities Committee. There, I, on behalf of Kirkland, have been able to elevate this issue with all the members of the legislative priorities committee, and those are elected officials city statewide. And so we've gotten a really good response from those other elected officials. So this is becoming a topic that's getting elevated statewide. Thanks.

Thank you. Council Member Prim, did you have your hand up? Yeah, one more question. So the other thing is, I think given just how many factors there are that are going to be contributing to this rate increase across the board for all of our utilities, I think what would be helpful also is like understanding kind of the timing of when each of these individual factors would take and would become effective so that we're prioritizing like, OK, you know, like the King County is going to implement this rate increase by next month. OK, all of our efforts should go there and we should focus on that. So I just wanted to maybe understand, like, are we factoring in timing as well of like when these various components could be implemented and then kind of prioritizing accordingly?

We are. I think the challenge is, unfortunately, many of them are coming at the same time, right? Part of the reason we called for the summit and the summit occurred is that it just kind of happens that all of them are hitting the same tipping point of major rate increases. So I think part of the reason we asked for additional resources to be part of the discussions is we're having to engage everything all at once. You know, the solid waste discussions, the regional water quality discussions, the Cascade Water Alliance discussions, and our own, looking at our own work. So, but yes, that is exactly what we look at in terms of like where we send council members to testify or drafts that we make or what staff goes and what they monitor. We're really trying to make sure that we're hitting the right things at the right time. That's a great point.

Thank you. Thank you. Anyone else? All right, Jenny, Brooke, Amanda, thank you very much. We'll see you soon. Jenny, is there something you want to add?

I wanted to add if we could go to just the final slide just to wrap up. We'll be coming back to you on September 15th with proposed rates that incorporate some of the levers we talked about today. And then again on October 20th so that we can have our new rates be effective on December 1st for water sewer and on January 1st for surface water and solid waste. So thank you.

Great, thank you. Perfect. Thank you, Walt, for your time. Thank you, Brooke and Amanda. We are now going to move on to our second study session item, which is a perfect segue based on the conversation we just had, which is the Kirkland Cares Low Income Support Program Update. City Manager.

Thank you, Madam Mayor. So this was originally going to be a business item, but we felt like it actually made sense to have it as part of the study session, since it's really about the impact of the rate to get lower income folks. And also the impact of this program on the overall rates themselves. Those two things are linked clearly and want to pay close attention to both aspects. So I'm here to give you an update on what's been going on with our Kirkland CARES program and sort of next steps. We're going to start with Michael Olson, our director of finance administration, to kick us off. He's going to introduce his team and he's going to speak.

Good evening, Mayor, Deputy Mayor, and Council Members. Quinn is our program coordinator for the Kirkland Cares Low Income Support Program, and he will be making the presentation tonight. And Tim Hanser, our operations manager, will be available for questions as well as myself. Go ahead, Quinn.

All right. Good evening, Madam Mayor and Council Members. I'm Quinn Glebe. I'm the current program coordinator for the Kirkland Cares Low Income Support Program. This presentation is an update comprising of about eight slides from the program and we'll cover the following, a brief timeline and overview of program activities and administration, outcomes and growth of the program over the last two and a half years, and potential expansion options staff have identified for the near future. So to begin with a quick recap, city council added $680,000 in one-time funding to the 2023-2024 biennial budget for the city's first universal utility relief program, expanding what was at the time the senior discount program to include discounts and rebates and expand coverage to all qualified low-income residents. The program was designed with direction and feedback from council throughout 2023 and established by ordinance that December and went into effect on January 1st, 2024. Of the original $680,000 budget funding, roughly $200,000 remains, and the language of Ordinance 04868 still defines the program administration and the benefits derived. The program was originally managed by outside contractors but became internally managed beginning in 2025. So a bit of background on program operation. The requirements for eligibility into the program are Kirkland residency and a household income below 80% of the area and media income. The area and media income is determined by the Department of Housing and Urban Development and then recalculated every April utilizing data from the Seattle Bellevue HFMA, which comprises King and Snohomish counties. For 2026, that means the threshold for qualification into the Kirkland CARES program would be a gross income of $93,350 for a household comprising of two people. It goes up and down depending on the members of the household, so we recalculate just based on the amount of individuals within a household. Discounts are applied directly to City of Kirkland utility accounts for water, sewer, and garbage services into the city bills directly. Discounted accounts receive a 50% discount on base water rates, a 25% discount on base sewer rates, and a 40% discount on base garbage rates. These discounts do not apply to consumption charges above the base rate, and they do not apply to extra charges for extra pickups, late fees, or shutoff fees. The creation of the Kirkland CARES program also expanded coverage to households in multifamily units that are not directly billed by the city. These discounts are realized through rebates that the city calculates and then sends to those households. Furthermore, we extend rebates to cover Kirkland related fees for businesses, pets and vehicle registrations. As I said, these rebates are received through direct check to the service address of a customer or via in-person pickup. Rebates for utilities are sent on a bi-monthly basis and one-time rebates for qualified businesses, pets and vehicle registrations are released on a monthly basis. Eligibility is determined one time at the point of application. and then on a biennial basis going forward. So this year in 2026, we are recertifying all of the accounts that were certified in 2024, recertifying them. So we'll review the administration of the program along with budget and potential participation growth. As I've mentioned earlier, the contract with our outside contractor, Forward, was not renewed in 2025. So residents now apply directly electronically or via paper application to the city directly. Excuse me, Kurt.

Yeah, I just wanted to be clear on that, that the forward, so we put out an RFP for someone to provide administration on the private sector. Forward was the only one who chose to reply. And after they did it for about a year, they decided it was too hard and they withdrew. So the reason that we ended up having to bring it in house is we actually didn't have anyone else to do it. And then when we did reach out, Uh, Kelsmer Phil Conan asked me, had we tried to check in with some folks, maybe do this other places. And we found for folks like HopeLink, they were actually proposing to do it for more than we can do it in house. So part of the reason we resulted with a temporary program coordinator was we found it to be the least expensive way we could do it, at least at that time.

Thank you for the clarification, Craig. So as Kurt mentioned, the city has hired a temporary program coordinator to assist in administering the program through 2026. That's me speaking to you now. And the city continues to accept applications, provide support, and process recurring payments to all applicants to the program. This includes all recertification, all payment processing, all eligibility screening, and all outreach of the program at this time. So a brief program summary over the last two and a half years. The program has expanded coverage of the discount and rebate programs to over 1,000 total households over those two years. 792 households now qualify for direct discounts on utility rates and across those households, $641,052 were discounted from utility charges between 2024 and the end of June, 2026 in this year. These discounts do not impact the program budget because they are realized through a lack of revenue from utility charges rather than rebated from the program budget directly. The average discount per household is somewhat bifurcated based on the services a household can receive. So for instance, if a household is in a North Shore Utility District or Woodinville Water District service area and receiving water and sewer services from those utility providers, they qualify for less discounts because they are provided less services from the City of Kirkland. That being said, a water discount for a single family residence is about $25.74 per billing cycle. For a sewer discount, it's $41.38. And the most common type of garbage service, a weekly 35-gallon pickup, is $42.06 per billing cycle. So that's two months. A garbage-only account with the most common type of garbage pickup will receive $252.36 in discount annualized. while a single family residence receiving a water and sewer and garbage service from the city will receive $655.08 in total discounts on an annual basis. Over that same time period, 229 total households qualified for bi-monthly utility rebate checks. Recurring utility rebates are calculated by city code and based on the bedroom size of the unit and the utility service provided. A recurring utility rebate for a garbage only account will result in $120 in total rebate on an annualized basis. While a one bedroom apartment receiving water, sewer and garbage services from the city of Kirkland will receive on average $360 in annual utility rebate. And then we also, as I mentioned earlier, provide business patent vehicle licensing rebates. These rebates are applied after initial payment by the customer and then a receipt is provided to the city to let us know that the payment was made. However, I will note that on business and pet licenses, the city also provides discounts to certain customers upfront unrelated to the Kirkland Cares program. So we see less utilization of business license rebates and pet license rebates for those reasons. So here we can see just a graph of overall program growth. As I mentioned earlier, the program has expanded each year since its creation from the original 277 senior discount accounts in 2023 adding 396 total accounts in 2024, 199 total accounts in 2025, and 149 accounts in the first half of 2026. These totals reflect the total of new applications, less the accounts that are removed from the program due to failure to recertify or for informing us of a household change that impacts their eligibility for the program, such as a move outside of Kirkland or a change in income eligibility. The majority of account growth has been driven by residents and single family residences, although 20% of the program totals are multifamily residences, such as apartment complexes. And then a breakdown of those 792 accounts that are receiving direct utility discounts, 792 of those are garbage accounts, 444 also receive water services, and 379 of them receive sewer services from the city. So the outreach that we've conducted over the past year and a half, we've used several different avenues to try and expand knowledge about the program locally and increase participation in the community. This includes distinct one-page mailers with program information that accompany rate change letters to all utility account holders. We believe this is particularly effective at the beginning of this year and increasing program participation and intend to repeat the effort with future rate change letters. We've also included blurbs in the Kirklander newsletter and staff has appeared on This Week in Kirkland podcasts. So our thanks and shout outs to the communications team and CMO for allowing us to do that. Staff has also done direct outreach via site visits and multifamily facilities and apartment complexes in order to directly assist residents with applications and questions, which drove much of the rebate account growth that we saw in 2025. Finally, staff has met with various local organizations to determine if there are potentials for expansion or collaboration between our programs. That includes King County Housing Authority, a Regional Coalition for Housing, North Shore Utility District, Puget Sound Energy, and Woodinville Water District. So this is the final slide and this is where we'll discuss our continued efforts to look at other ways to expand the program both within Kirkland itself and potentially involving other utility districts. So the first option that we have and the one that we intend on pursuing most readily is using data that was collated between the Public Works Service Water Team and the King County Assessor's Property Tax Information. Using that, we identified 500 households that would qualify for the direct utility discount do not currently have not enrolled in the program. And then an additional 200 households that would qualify for bi-monthly utility rebates that have not qualified for the program. This opportunity is a little unique in that we're utilizing the assessor's determination for property tax exemptions in 2024 and 2025, which was a period that the property tax exemption increased by $30,000 to $84,000 total. and became greater than the Kirkland CARES program's lowest income qualification level of $81,700. So that means that for 2025, the 700 households we've identified are more or less guaranteed to qualify for the Kirkland CARES program because the assessor's eligibility criteria is more stringent than our programs is. So staff is currently working through options to onboard these 700 households most efficiently. The second option that we have is a potential expansion into the North Shore Utility District service area. Right now, Kirkland Cares program only provides discounts and rebates to Kirkland provided garbage services in the area, but city code could be amended to allow for payments to North Shore Utility District customers for the difference between the amounts that North Shore customers pay and receive in discount and the amount that Kirkland Cares customers would receive in discount. Because of the difference in utility pricing between our areas, the difference in discount amounts and the difference in program eligibility requirements, this would require review on a case-by-case basis for each North Shore Utility District customer, determine whether or not they're already receiving North Shore discounts and what the difference between that North Shore discount and our discount is. We've included that as an attachment to our memo to council today. We'd also potentially require a data sharing agreement between us and North Shore Utility Districts that we would know the customer list of everybody they have was on discounts. We've also discussed the possibility of a shared application portal so that anybody that applies to North Shore would automatically apply for the curriculum cares program. We have not gone down that avenue just yet. Thirdly, we intend to reexamine the utility rebate calculations in the coming years. This is because the direct utility discounts that we give to Kirkland customers are based on percentages and thus automatically update whenever a new utility rate is adopted by the council. However, the amount of utility rebate per household is defined by city code specifically. And so that was last determined when the ordinance was voted on in 2024. As utility costs increase year to year, these rebates will begin to lag the discount amount that we intend. And so we'll need to be reexamined and redetermined. Finally, staff will continue to conduct outreach and process payments and applications throughout 2026 while working on potential administration options for 2027 and 2028. And finally, I'd like to leave it open for any questions and discussion you might have.

Thank you, Quinn. I'm really proud of this program and I'm very impressed with the outreach and all the work that you've done to expand this program. There's obviously a clear need. Council Member Falcone.

Thank you, Madam Mayor. Well, thank you, Quinn. First of all, I know this is a lot of work to administer this program. I can imagine a lot of details, right? Going through an income verification and all of that is not an easy process. So thank you for that. I'm happy to hear that we're signing more people up. I think that's a good thing. even based on static need, that's a good thing, right? But we know sadly that there's also growing need, right? Which is how this nicely ties into our former discussion, our last agenda item. And I really appreciate too in the memo where you talked about being proactive in identifying other people who may qualify for the program as well. I know we're doing a lot of that already, but thinking of how else can we find folks who may be eligible for this program? I appreciate you mentioning the shared portal. I think that's a great idea. You know, I think it's important for us twofold to reduce our administrative costs, but also to reduce burden for applicants, right? We know that those that live with a low income have a lot of paperwork and a lot of phone calls and a lot of, you know, things, a lot of red tape. to qualify for the programs that they so desperately need just to survive in our community. So I appreciate that the shared portal could potentially address both of those things because obviously our administration costs here are pretty high proportion of the budget and anything we can do to reduce that. I wonder if in the meantime, I mean, looking at like the folks who already qualified for NUD at like the 50% AMI, do we have to, you know, means test them if they've already qualify for that? Can we automatically accept them without having to go through our process to save again on burden on them and administrative costs on us?

So the short answer is yes. Based on city code, anything that the director of finance deems acceptable for our purposes we could use. So, for instance, we do already use King County property tax exemptions. We could also use NUD's exemptions in order to get these people on the program. The biggest barrier to that right now would just be getting a list from NUD, which would require something like a data sharing agreement. And they have mentioned they're willing to do so. We would just need to go through those legal barriers.

Yeah, that would be great for us to do that, to be able to, as I said, save both administrative cost and burden to them. So thank you. I appreciate being proactive. And I love the idea of a shared portal, but I would love that for as many of these different jurisdictions and entities as we possibly could, again, just to have more of an economy of scale savings there. So thank you.

Thank you. Councillor Paschall?

Yeah, thank you for the presentation and the information that you shared. I'm going to kind of build off of a little bit of what Council Member Falcone was talking about. And, you know, the one thing I guess that surprised me a little bit wasn't, I mean, I wasn't surprised about the need and the fact that that's likely going to increase with some of the utility costs that we're forecasting. But I was a little surprised by the administrative costs. It looked like $357,000 between 2024 and 2026, which seemed to represent a pretty good chunk of the available funding. And so I know that you talked about reducing those administrative costs. I just want to emphasize that I think that'd be good, but I don't want to do it at the expense of making sure that we continue to have a program and monitor those that participate in an efficient way. But my ask is just to track that over time to see how we are reducing costs, how effective we are being. So the point is, let's just continue tracking that and showing how we're making progress towards that. That would be helpful. Thank you.

City Manager.

Yeah. So I just thank you for those comments. I do want to add that we also highlighted the administrative cost, but one of the things that is important to note is the primary part of that cost is actually Quinn's position. And he has done an extraordinary job, not just reviewing eligibility and stuff, but also this, all the marketing, everything he much talked about pretty much was also his work and trying to reach out to folks. So we did work really hard to try to find an alternative way to provide this service. And as I said, we didn't get any, proposers. And then when I reached out to folks, everyone to charge us more. So when we asked everyone else, they're like, well, we did two or three people to do that. So we very care very much about the administrative costs. We're going to look for creative ways to bring that down, but we haven't quite figured out that not yet. And then the final thing I'd say in terms of the overall cost, what is not really shown on that list is the foregone revenue that people get because they get the discount. So it's actually a better number than it looks because we're basically, um,

that's the money that came out of the pot you gave us, but it's not the discounts everybody's receiving.

So, but so noted, we definitely want to find a way to bring our numbers down if we can.

Thank you. Anyone else? Quinn, you are doing an excellent job on this. I really appreciate it. You may have said this in your presentation, but are there, oh, Councillor Falcone, I'm sorry, I didn't see you, but I'll go ahead and finish. Are there other are you getting requests from applicants for other types of relief? Is there anything coming up that we're not capturing now?

I would say the greatest amount of requests that we get that are outside our current ability to do anything about is really just expanded discounts of what we already provide or misunderstandings about the curriculum-related nature of the fees. So, for instance, for the vehicle registration, we're only rebidding that $20 fee that the city of Kirkland assesses on a car registration. Often when people hear about the program, they'll hear, you know, oh, I can get help with my vehicle registration and the cost is in the hundreds of dollars. The $20 fee, while appreciated, it's not what somebody imagines when they hear about that. For other city services, we don't hear as, or I have not heard as much. But we have tried to increase our communication about exactly what we provide to try and limit, you know, those sort of situations going forward.

Okay, thank you. Councillor Falcone.

Thank you, Madam Mayor. Thank you for the explanation, Quinn, and also city manager for your remarks about, you know, the cost driver being Quinn's position, right, which is really important. But I do think as we talked about the need continuing to grow, not only like, and you know, as Quindage you were talking about just the overall cost per customer or per resident, right? That that dollar value will likely increase, but also the number of residents who qualify may also likely increase. So I see this as a, you know, how to make your position as efficient as possible, right? And so as we grow, even if the dollar amount remains the same, you know, plus, you know, annual, you know, um, pay increases that the percentage would decrease because the total pie is going to be larger. So your percentage of the pipe that is the cost of your time would be slightly less like we already talked about with some of the other things, but also. I'd love for us to look at instead of annually every two years doing means testing, right? I know that there's precedent for that in some other organizations that do means testing. That may save you some time. And also like to look at what other cities are doing too to expand some sort of shared portal, right? To see if this is something we can encourage in other cities, which would be good for residents, but also to help economy of scale. So again, thank you so much.

Thank you. Councillor Tim Chisholm, did I see your hand? okay all right anyone else all right quinn are you is that it that's all i've got thank you council awesome thanks so much okay we are concluding our study session a few minutes early um so we will be back at 7 30 for our regular meeting thanks everybody following an update on the 2027-2028 utility rates and an update on the Kirkland Cares Low Income Support Program. For those of us just joining us, I will note that tonight's council meeting is being held virtually due to critical maintenance and upgrades underway in council chamber. During the meeting, we may take brief breaks as needed to address any technical issues and help ensure that the meeting proceeds as smoothly as possible. I do see a number of people in the Rose Hill room. Thank you for joining us. We do not have any proclamations on our agenda, so we will start tonight's regular meeting with items from the audience. So, this is a time in our meeting when we normally hear from the public. Please limit your remarks to three minutes. We will provide up to a total of 45 minutes for our items from the audience, with no more than six speakers on a subject regardless of their position on the subject. to address the council during this items for the audience please sign up using the online public comment instruction link your first and last name displayed in zoom must match the registration form for those participating by phone please dial star 9 to be recognized to speak Items from the audience is an important part of our business meeting. We ask that everyone be treated with kindness and respect. Please do not clap or applaud or otherwise openly express your agreement or disagreement with the speaker. When that happens, even when supporting the speaker, it can be disruptive of the meeting and discourage others from sharing a different viewpoint. We discourage people from using obscenities and making personal attacks against others, and we ask that you direct your comments to Council, not to staff or audience members. In addition, because they can be disruptive, signs and placards are not allowed in Council Chambers or the Rose Hill Room during our meetings regardless of their content. As a reminder, state law does not allow items from the audience to be used for promoting, opposing, or discussing a candidate's campaign or ballot proposition. Kirkland prides itself on being a respectful, welcoming community. We want everyone to feel like they belong in council chambers or the Rose Hill Room, expressing their viewpoints. City Clerk, who do we have signed up to speak?

Thank you, Madam Mayor. At this point, we do have 12 guests wishing to speak. We'll take the first three in this order. Christy Drackett following us on site, Jerry Knott on site, and also Alicia Ramirez on site. Please approach the podium.

Welcome, Christy, and you can see the timer on the screen? I do, thank you. Thank you, go ahead.

Hi, my name is Christy Drackett. My family lives at 6150 130th Avenue Northeast, which is right against the southern boundary of the South Reservoir Water Tower site. I'm writing to ask for your help in finding a better outcome for a serious problem with the current project design. Our home is separated from the reservoir by a grove of mature western red cedars. For generations, this grove has screened our home from the tank and its barbed wire security fence. It has also sheltered wildlife, including my own children climbing and swinging in their branches. As currently designed the project would remove all of the trees between our house and the water tower structure. It would also relocate the barbed wire fence right up to the property boundary which is a mere 13 feet from our bedroom window. If the fence were moved on top of the boundary it would leave us no ability to plant anything to screen our property from a barbed wire fence. And all of that aside, I actually want to talk about the trees that are slated for removal. The city's arborist report did not assess the western red cedar grove that sits between my house and the reservoir. Though this grove is on city's property, it can currently only be accessed from our property. and it's clear from the absence of sufficient analysis in the city's report that this grove was mostly ignored when the team reviewed the proposed water tower designs we hired our own consulting arborist which documented nine high retention value trees in the grove six of them are landmark trees which are trees measuring larger than 26 inches in trunk diameter at breast height The ones I'm talking about are quite larger than that. The diameter is as large as my arms spread out. These trees are gigantic. The three of the trees that are designated landmark trees are missing entirely from the city's inventory. So far, city staff have acknowledged the current report is deficient, but no commitment has been made to correct the design or mitigate the outcome. And as things stand, the city is relying on an erroneous report and we believe violating its own tree ordinance, which is Chapter 95. If it proceeds to be clear, we support the city maintaining its water infrastructure. What we're asking for is a design that preserves the grove and protects the buffer between our home and the facility. And I don't need to tell you, I know that there's no replacing healthy 100 plus year old trees. Forest health specialists have noted significant western red cedar dieback in the Pacific Northwest since 2017 due to climate change and hotter, drier summers, which we're experiencing right now. as our arborist report lays out young western red cedars the kind the city keeps assuring us will be replanted have very low survival rates we also know that new trees simply planted next to each other does not constitute a grove nor mimic the benefits of one older western red cedars need to be retained because the new ones are dying christy i apologize your time is up that's okay thank you

Thank you for your passion on trees. And I know that Julie Underwood, our public works director, plans to come walk the site with you. Thank you.

Yeah, I would invite anyone that wants to come out anytime. Thank you so much. Jerry Knott.

hi i'm jerry not representing the mariner condominiums next to marina park on kirkland avenue i initially wanted to express our concerns about the excess noise created by loud boat music and large groups of people sitting on the dock late at night after 10 o'clock the same three or four boats tie up at the entrance end of the dock which is directly below the western units of the mariner come on baby The police enforce the standard residential noise rules in Kirkland, but you have to call the non emergency number to register a complaint with the Kirkland police. We call this number many times during the summer and the police usually respond within 10 to 30 minutes to shut down the loud music and parties on the dock. The same boats will return the next day and the noisy parties will start it up again. We would suggest a regular 10 PM walk through by police to shut down the loud music and disperse the crowds at the park side of the dock. The park rangers walk through the dock two to three times to check a day, to check if the boats are paying their mortgage fees for that day. They leave by six or seven at night after they tag checks and give tickets where needed. No one with authority is around to maintain or enforce the dock rules that clearly state where you can moor your boat, where you pay, no excessive noise allowed, no drinking on the dock, and no rafting alongside other boats on the south side of the dock. These rules have not been regularly enforced since the harbormaster position was eliminated during COVID, and there's no one on the dock with authority to end any rule-breaking activities. A few altercations between mariner tenants and loud boat operators and their guests have already occurred this summer, which have involved fistfights, verbal threats, and police involvement regarding the disputes. Okay, tonight I would like to express the Mariner homeowners request that their concerns regarding the excess noise be considered when planning the new dock construction for next year. This would include a clear understanding of the rules and method of enforcement for the upcoming years. We are taxpaying Kirkland residents who do not want the new dock to become a playground for loud music and partying crowns. Examples of this activity would be Juanita Bay where they had to enforce new rules as the nearby homeowners requested to end this type of offensive behavior. and Andrews Bay in the South Lake, Washington, where they are initiating new rules to control the noisy crowds during the summer. The dock mortgage should be for boarders looking to visit Kirkland, tour the shops, enjoy the restaurants, and be able to stay on their boat and not be assaulted with loud music and obnoxious behavior. Thank you.

Thank you, Jerry. Alicia?

Alicia Ramirez will be followed by Erin Belmore and Brady Nordstrom.

Thank you.

Good evening, Council. Thank you for letting me speak tonight. First off, I want to thank you for passing Resolution 5729 last year related to preparing the Sydney community for ice activity and for the progress towards the goals of the resolution that were shared during the last meeting. However, despite this progress, time is not on our side. During the last several weeks, there have been an alarming uptick in ICE abductions of community members in Shoreline, Seattle, Renton, Berrien, Tukwila, Redmond, Linwood, and Everett, just to name a few. Yesterday in Lake Forest Park, a community member was violently pulled out of their vehicle and taken by ICE in broad daylight in the middle of the neighborhood. THIS INCIDENT IS ONLY ONE OF MANY HAPPENING ALL OVER THE REGION ALMOST EVERY DAY. I URGE YOU TO MOVE QUICKLY TO IMPLEMENT THE REST OF RESOLUTION 5729 AND TO PROVIDE MORE RESOURCES TO RESIDENTS REGARDING IMMIGRATION RIGHTS AND ASSISTANCE FOR IMPACTED COMMUNITY MEMBERS WHO HAVE LOST A BREADWITTER OR FAMILY MEMBER TO ICE. THANK YOU.

THANK YOU.

I'm here today not to attack anybody, just trying to get some resolution. Everything's based on my opinion, simply because City of Kirkland will not answer any questions and or give any help. Just kind of roll through stuff quick so we don't have three minutes. This is the original construction of one particular deck. You can see some support that was done with concrete cinder blocks. No engineering done. Jeff let us know that engineering at City of Kirkland is required. He also let us know that permits are required. I reported it. City of Kirkland did nothing. This is what happens when nothing's done. Redone again, second time, no permits. City has not done anything. Then Adam from planning comes out. I didn't see any construction, any evidence of construction. Well, there's plywood, there's still the cinder blocks. I mean, I don't know if that's a guy that's leading our planning. We're in big trouble. uh by the way i i was told that not contact the fire department for that and uh i've been on it that our civil servants are using those decks i don't know if their families or friends know that they're in danger possibly every day here's One catch basin that was replaced, tied into a large catch basin that goes under a fire lane. Right here, possible sinkholes. We have water mains that were replaced, possible sinkholes. Firefighters, police, cruisers, other citizens may or may not know about what can be possibly done. Here's a packet that was given. You were at the meeting May 1st. Why you guys refuse to answer questions is beyond me. You're elected officials. You're here to answer questions. You're here to do stuff for the people. Here's David's promising an email that I'm going to get answers by May 13th. Still no answers. Right there. Boom. Constant delays. He said he had a meeting with experts. Experts were going to be able to get me the answers after the May 13th meeting. No answers. After our council meeting the other day, I said that I was not able to contact council and or fire based on David's emails. Here's his retaliation email that states, oh, well, you can contact them. I never said that. And oh, Aaron refuses to meet in person, but Aaron doesn't. I have more emails on that. And then here we have in David's emails right here where he says don't contact fire or council. So blame game. We're not going to enter into the blame game with David, or my attorney said. But David keeps doing it. Adams keeps doing it. David takes snippets of emails and tries to change the outcome of it by what he's stating. You know, Mayor, you're really good at public speaking. Your follow-through really is awful. You know, you say Kirkland's all-inclusive. You say all this stuff, but there's no action. So I emailed the city council. I hope all you guys reply. I don't want to have another possible violation from you guys not replying. So let's get on that. Let's put this thing to a head. Let's get this done so all the citizens can live safe. Civil servants can operate safe. They don't have to worry about not going home to their family because a deck crushed them. This is ridiculous. We'll see you next time because I only got three minutes. We're going to get to know each other real well, guys.

Thank you. All right. Next, we have Brady Nordstrom.

And Brady's joining us virtually.

All right. Brittany, are you there?

It might take just one moment.

OK.

Hey there, folks. I believe you can hear me now, so I'll go for it. Hi, my name is Brady Nordstrom and I am the Associate Director of Government Relations and Policy at the Housing Development Consortium. I'm also here to represent the voices of the Eastside Affordable Housing Coalition, which consists of about 30 organizations that build, operate, and advocate for affordable housing on the east side, including in Kirkland. I first wanted to thank staff for their hard work and early engagement around the housing on faith-owned land code amendment that's on the agenda today. We support the initial proposal from staff and the proactive engagement that was done with the affordable housing community, including our coalition members. This policy is a win-win for faith communities and the city of Kirkland. Faith organizations can use their land to improve their financial standing while contributing to mission-aligned community goals. It's also a good chance for the city to expand affordable housing. However, this policy is only worthwhile if it can be used by these faith communities. So we just wanted to thank staff for setting a solid foundation for this success. Some of the things without going into all the details, but flexible and clear design and development standards, Increase capacity in exchange for affordability with the chance to get to deeper levels through extra bonuses. And then the buy-write approval and administrative review for departure requests. Something that is pretty common in development is that almost every project requires a departure. So we wanted to thank staff for including administration departures for these minor deviations. We would also ask for more substantial code deviation requests to have a pathway as well. So faith communities are not development experts. And so we support the additional parts of the code that's being recommended or the things that go beyond the code rather, including expedited permitting review, pre-submittal conferences and staff support. Future work will also be needed to educate these faith communities about what this tool is, how they can use it, and in what circumstances. It ultimately takes knowledge, money, and time for a faith community to even consider development and then go through a discernment process. So we look forward to this next stage as well. So thank you for your time this evening, and thank you for moving forward this important policy.

Thank you, Brady.

All right city. Next we have Alex Zimmerman lay Institute and Lilith Winkler short shore. The first 2 on site in the last virtual.

All right Alex. Yes, thank you my name Alex Zimmerman president of stand up America one speak about the low income problem. So it meant months ago. what involved King Country Housing Authority. Eight months ago, I gave my request, few question, to Deputy Mayor, Mr. Black, because he commissioner of King Country Housing Authority. So situation very simple right now. Last year, I come three time to meeting King Country Housing Authority. After three meetings, they give me trespass forever. So all rest of my life, I cannot go. So Mr., black did this you know what is mean why because I have little bit different opinion maybe very different opinion because King country house in authority what is Commissioner mr. black deputy mayor is a pure crook and bandita and killer there's a very serious problem they more dangerous and Hitler Nazi Gestapo fascist you know what is me We have a constitution, law, for 250 years. Hitler don't have this. In freedom of speech, Hitler don't have this. If we have executive order a year ago from Trump, you know what is making country, how is the authority supposed to belong only to American citizen? Because I am come for this three meeting, what does I have? Investigating, oh guys, you spend $100 million for not legal immigrant. And people like me, senior citizen, disabled, low income, you know what it means, don't have chance, go to country housing authority, you pay 30% from income, like my income, for example. I cannot afford to live in a fine apartment ever. low bedroom you know what is four thousand bucks of our income so this guy very interesting because you know about this i speak about this and all council know about this and no one answer but this exactly what is you doing because i told you more dangerous than nazi gestapo fascist this guy who spoke before me talk about this exactly same Because you're Democrat, you make from King Country and from Kirkland, you know what it means, two and a half million slaves, and Kirkland has this hundred million slaves, which is very quiet. Nobody talking about this, you know what it means, so you're more dangerous than Hitler, Nazi, Gestapo, fascist. Hitler talking about German for every German. You kill every American citizen. It's totally opposite. You are real bandita. You are real killer. When you stop doing this, why low-income citizen American don't have right? We were Trump. We were New American Revolution. Stand up slave and happy cow. We have executive order from president. Idiot.

No, bandita.

All right, next we have Leigh Ann.

City Clerk?

Mayor Curtis, we have a guest here that's announcing a very special scholarship and they're requesting that that guest be heard from first. And that person is Lilith and she is online. Can we accommodate that request, please? Absolutely. Stand by.

Good evening, city council members and Mayor Curtis. My name is Lilith Winkler-Shore. I served on the Kirkland Youth Council from 2006 to 2012, and I'm very excited to be here today to present the eighth annual Matthew Dahl Kirkland Youth Council Memorial Scholarship Award. Matt served on Kirkland Youth Council from 2009 to 2012. He passed away in February of 2019. Matt was proud of his service to his community and loved being a part of the council. In his spirit and memory, his parents, Linda and Bob, established this annual scholarship to benefit a Kirkland Youth Council high school senior. I'm here representing the Scholarship Review Committee, which includes myself and Allison Blair and Kenny Drabble, who are there in chamber today. The three of us have served on KYC together alongside our dear friend, Matt. Especially exciting tonight, I'm here to introduce Leigh Ann Satute to the Council and to the community as the 2026 recipient of the Matthew Dahl Kirkland Youth Council Memorial Scholarship Award. Leigh Ann is here with us tonight and will make some remarks after this announcement. Leigh Ann graduated from Juanita High School this year. She will be attending the University of Washington. Leigh Ann is to be commended for her extensive service and leadership to Kirkland on the Youth Council beginning in 2024. We are incredibly touched by her responses to the essays and we would love to share one quote which we really think gives the heart and soul of what Kirkland Youth Council is about and particularly about what Leigh Ann's service is about. She wrote, the most valuable skill I've taken away from KYC is the ability to build bridges between people and create spaces where others feel genuinely seen, heard, and valued. I realized how much belonging shapes the way people contribute, collaborate, and grow. When I became co-chair, I began thinking about leadership not as directing people, but as intentionally creating connection. Congratulations, Leigh Ann. Kirkland Youth Council continues to provide an important formative opportunity for local youth. We want to recognize Reggie Schubiger for the wonderful guidance she continues to provide as the program coordinator for the Kirkland Youth Council. And thank you for the opportunity to make this scholarship announcement. And now I believe Leigh Ann would like to use her public comment to say a few words. Thank you all so much and congratulations again. Thank you.

Good evening, Mayor Curtis, members of the city council, and everyone here tonight. First, I would really like to sincerely thank the Dell family and the scholarship committee for this incredible honor. I feel so genuinely honored. It really means so much to receive a scholarship that celebrates Matthew Dowell's commitment to serving our community. And I also want to thank the city of Kirkland for continuing to invest in young people through programs like the Kirkland Youth Council. In the excerpt that was shared of my scholarship essay, I talked about building bridges between people and creating spaces where others feel seen, heard, and valued. That became truly my biggest takeaway from KYC, but it also changed the way that I think about leadership. When I first joined KYC, I thought I was joining a group that planned events and volunteered in the community. While that is still true, I never expected it to shape the kind of person that I wanted to become. It taught me that meaningful leadership isn't about having the loudest voice in the room. It's about making sure that people feel comfortable using theirs. And some of the moments I'm most proud of weren't when I was the one speaking, but when I saw someone who had once been quiet begin sharing their ideas because they finally felt like they belonged. As someone who has moved between countries, cultures, and communities many times, I know how meaningful that feeling of belonging can be. That's why creating spaces where people feel welcomed, included, and valued is something I care so deeply about, and it's a lesson I'll carry with me long after my time on KYC. Receiving a scholarship in Matthew Dowell's name is especially meaningful because it reminds me that the bridges we build and the impacts we make can continue long after we're gone. Every act of kindness, every opportunity we create for someone else, and every person we encourage has the potential to shape the community in ways we may never fully see. And I hope to carry that lesson with me long after my time on KYC is over. So thank you again to the Dahl family, the scholarship committee, and the city of Kirkland for this incredible honor. It is something that I will always be grateful for and I will carry with me whatever life takes me next. Thank you.

Thank you, Leigh Ann, and congratulations. I was going to say we would clap, but you can't hear us. So thank you so much. All right, next we have Erin.

Erin Hamilton, followed by Alicia Ruiz and Sean Hornbrook.

Thank you.

Hello again. It's wonderful seeing all of your virtual faces. It's been a hot minute, but I always like to make an effort to recognize people that go above and beyond, especially when it comes to my community. Even though I'm a little bit late, Redmond keeps me busy, but I would like to recognize Chief St. Jean and the Kirkland Police Department for doing just that and inviting me to present my Transgender Community Interaction and Engagement for Public Safety training course. It's a mouthful. It's a work in progress. uh back in june it's not something that mike needed to do or had to do but after my quick and dirty pitch and a conversation uh he was on board he wanted to do it signed up let's go um That truly means a lot. It was a great training session. The officers in attendance passed with flying colors, A plus gold stars. They asked tremendous questions and it gives me hope to see law enforcement taking these opportunities to learn about my community and what they can do to help. And I don't know if any of you remember, but the last time I was Over there. Giving the speech on Transvisibility Day, I spoke a lot about knowledge is power. This is where it kind of starts, this training program that I've been working on with public safety is to help bridge that gap and rebuild these bridges between law enforcement and my community. And I'm actually starting to see progress, especially with interactions from law enforcement with the community. So it's giving me hope that what I'm doing is good. I hope and that we can continue to rebuild that trust. I like to thank Mike very much because, you know, with our conversations, you've always been I just want to I just want to do what I need to do to make you all happy. and feel safe and important. And that really means a lot. So I just wanted to recognize those efforts and appreciate what the Kirkland PD is doing. And hopefully we can take you all can take that to. We're all coming in September, so hopefully you're a little bit more prepared for dealing with the community from afar or however they want to be doing that. So thank you very much.

Thank you, Erin. We sincerely appreciate you showing your appreciation. So thank you very much. Alicia's next, correct?

Correct. She is online, so we're waiting for her to go through the transition here.

Okay.

Hi. Good evening, Mayor Curtis and members of the council. My name is Alicia Ruiz and I'm here today on behalf of Habitat for Humanity, Seattle King and Kittitas counties to speak in support of the ordinance expanding affordable housing opportunities on faith owned property. Habitat's mission is simple. Everybody deserves a decent, affordable place to call home. We work toward that mission through permanently affordable homeownership and partnerships that turn underused land into real housing opportunity. This ordinance speaks directly to that work. Faith opportunities across the east side often hold land that is incredibly valuable and underused. These parcels represent one of the most promising and most overlooked opportunities to build affordable homes in places that already have community roots, transit access, and neighbors who want to see them thrive. By allowing streamlined permitting and reasonable density and height flexibility for residential development on faith-owned land, This ordinance removes real barriers, the kind that often stall affordable projects for years or kill them before they start. It gives faith organizations a genuine path to put their land toward long-term community benefit. And it gives nonprofit developers like Habitat a viable partner to build with. We know this model works and it's already helping families move from renting to owning in communities across our region. And we believe it can work in Kirkland too. Habitat is committed to deepening our presence on the east side. We want to work directly with Kirkland's faith communities, city staff, and this council to identify sites where this ordinance can turn into real permanently affordable homes for local families. We see this legislation as an invitation and we intend to answer it. We urge you to pass this ordinance and we look forward to building what comes next together. Thank you.

Thank you, Alicia.

Sean Hornbrook virtually. After Sean, we have two additional guests, Ken McKenzie on site and Joe Kunzler virtually.

Thank you.

Sean, do you hear us?

How about now? Can you hear me okay?

We can. Go ahead.

Great, thank you so much. Good evening, Ms. Mayor and to council. I'll be really brief here. My only comment, it has to do with the a Rita agreement and I wanted to just I'm sure the members of the Council and Madam Mayor familiar with what's what the agreement is about. One, it's affordable housing, which is great, and I think we can all get behind that. But my concern with this new agreement is that in 2019. A Rita benefited from the. the MFT pilot program. They already gotten a tax benefit, received a tax benefit for this property, same footprint. So what are we going to get with another tax break plus the no interest loan as members of the Kirkland community? I've lived here for homeowner for 23 years now. Great place. I'm sure we can all agree on that. And I just wanted to know what we're going to get for benefit because we're going to be taking, giving them a tax break. that has to still be paid the amount of money due that it has to be assessed. It's gonna have to come from somewhere. So what's the benefit gonna be? Because that's also money that's not gonna go to other places, to different programs for affordable housing. So when I looked at this agreement, I noted that we're not getting any new units that are affordable. Also, this particular property is inherently inexpensive and well below the 60% median threshold of apartment rental. So we're looking at the benefit because we're paying more and they already had a benefit. So they're back again for a second benefit. So what are we going to get? No more new units. so maybe a guarantee that that it's going to stay low well there's nothing that's been presented that i can see that is going to cause these micro apartments uh micro studios to increase as far as the size and their footprint we're not getting any more units that's not going to change if i switch to a new buyer they've got the same footprint So if they want to refurbish it or whatever, they're gonna have to expend an inordinate amount of money to make this a different rental value property. So I'm asking and urging a no vote because I don't see a benefit or new affordable housing with this particular agreement. And I thank you all for your time this evening.

Thank you, Sean.

Yes, thank you. I'm sorry, that was it.

All right, I thought you were done. Thank you so much.

So I'm here to talk about the tool library and the RFP response. So it's submitted by the Eastside Tool Collective, which has no form right now. And they say they're going to operate under physical sponsorship of the South King Tool Library. So I went digging into the IRS database and found the South King Tool Library. They haven't submitted their tax return for two years. So they're right on the verge of losing their tax exempt status and yet the city is anticipating that we would do business with them as a tax exempt organization. The RFP response does not include any description of what fiscal sponsorship means. Fiscal sponsorship is extremely broad and very complex. Sometimes the physical sponsor acts on behalf of the organization, and sometimes they act alongside. We don't know. And yet, we're going to be asked as a city to make out a check for $100,000 to presumably South King Tool Library, and we have no idea what the relationship between them and the Eastside Tool Collective is. So if we don't give the money to the Tool Library, the South King Tool Library, then somebody's gonna have to pay taxes on it, and that's not in the budget. So we need to know what legal entity the city's going to be working with. Otherwise, the RFP is kind of non-responsive. We just don't know. So why is this RFP response so empty in critical financial areas? Why isn't anybody giving it a once over? Is the RFP just a formality? Oh, well, we're all friends, and it's only $100,000. So we really don't have to be very careful about it, because we'll sort all this out. I don't think so. I think $100,000 is a lot of money. And I think that before we process this RFP, before we have any kind of agreement, we have to kind of get out of this one hand washing the other relationship and instead create an arm's length relationship between the city and our contractor so that we get our money's worth and we know whom we're working with and what we're going to get for what we spend. Thank you.

Thank you. All right, Joe Kunzler.

Can everyone hear me? Yep. Thanks. Hopefully this thing works. New kind of new technology, new form of Zoom. So while we get through this as quick as I can, we have two minutes, 50 seconds. Really would encourage city of Kirkland to look, I've asked you to do this before, I ask you to do it again, considering the remarks of a certain Alex, and none of you felt like you could speak up and say that was wrong and historically untrue among other things. that you need to really talk to your friends in Redmond and you need to talk to your friends in Bellevue about getting some council rules because you're spending a night away from your families here. You don't deserve to be compared to mass murdering genocidal monsters. I'm not even gonna use the word Zimmerman used, I know better. And I find those kind of equal vacations unfair to you and your friends and family. I find them unfair to the staff and the community to have to sit through this. This is not why I fought for public comment so hard during and shortly after the pandemic. This is not okay the way you're being treated, and I think it's incumbent upon you to stand up for each other and push the boundaries here. Redmond did. It looks like Zimmerman's intimidated from going there. Mercer Island did. Zimmerman doesn't go there anymore. Seattle really has, and Zimmerman doesn't go over there anymore. Can I see a pattern? I think I've made my point. It's kind of running a bit late. I want to wish you all well and be safe out there. Thanks for all you do.

thank you all right city clerk does that end our public comments yes it does all right thank you we are now moving on to the consent calendar before we have a motion i'd like to ask the deputy mayor to present the audit of counts uh thank you mayor thank you mayor we are now move or sorry i always

Read from the wrong section there. Thank you. We had payroll in the amount of $10,432,835.26 and bills in the amount of $12,978,410.94. Thank you. Is there a motion to approve the consent calendar? So moved. Oh, wow. I think that was Council Member Prim, seconded by Deputy Mayor. Is that right?

Council Mayor Prim, were you the motion maker? OK. All right, it's been moved by Council Mayor Prim, second by Deputy Mayor Black to move forward this consent calendar. Is there any discussion? All those in favor, please say aye.

Aye.

Any opposed? Motion carries 7-0. Thank you. All right, we are now moving on to our regular business agenda. Our first item of business is on alternative delivery of the Peter Kirk Pool project, city manager. You're muted.

That was a brilliant opening too, and I've just stepped all over it. Thank you, Matt and Mary. So this is your presentation on the alternative learn the Peter Kirkpool project, as you know, you gave us permission to go to the state to see if they would approve the project. They did you're going to hear about that, and then it requires under our code, the City Council to give staff permission to proceed with this as an alternative delivery method so we're going to counsel patient tonight, and we are looking for a motion to approve us to move forward. Here to give you that presentation is our Senior Project Engineer, Annika Davis, our City's Consultants at Turner and Townsend, Harry, and our Julie Underwin, our Director of Public Works.

Thank you, City Manager. Good evening, Madam Mayor, Deputy Mayor Black, and City Council. Thank you for this opportunity to provide an update on the Peter Kirkpool project. We can move to the next slide. As the city manager summarized, in June, Council received an overview of the progressive design build and supported staff's recommendation to apply to the state's project review committee, PRC, for authorization to use this delivery method. Tonight we'll briefly recap the Peter Kirkpool project and why staff continue to recommend progressive design build. Then we'll summarize the PRC's decision, explain how this delivery method protects public value, walk through the planned schedule and procurement process, and conclude with recommended council actions for tonight and in the future for this project. It sounds like a lot, but it's only 10 slides and we're already two down. So, all right. Project summary. The Peter Kirkpool project is primarily a renovation project. The existing facility has reached a point where investment is needed to address aging building systems, the pool shell and deck, mechanical and electrical systems, accessibility improvements and renovations to the bathhouse. With this, the project provides an opportunity to improve the community's experience by replacing the existing waiting pool with a more functional activity pool and expanding the bathhouse to include family and all gender changing rooms. For previous council decisions, the scope will not include relocating the pool entrance to Kirkland Avenue and exploration of the pool enclosure. As shown on this slide, the project is supported through a combination of impact fees, REIT 1, Kirkland Parks and King County Parks levies, a grant, potential debt financing, and for a total identified funding package of approximately $11.7 million. The complexity of delivering this work within an existing operating aquatic facility and coordinating all of these interconnected systems led the staff to recommend progressive design build. Progressive design build is well suited for projects that involve technical complexity, unknown existing conditions, and challenging schedules. Those are exactly the characteristics of our Peter Kirkpool project. The project includes specialized aquatic mechanical systems and integrating new systems with existing infrastructure creates uncertainties that are best resolved when the contractor can join the team early rather than after the design is complete. At the same time, the project must balance immediate infrastructure needs while maintaining seasonal operations. Ultimately, progressive design build allows the owner, designer, contractor, and contractor to collaborate early to refine scope, improve constructability, manage risk, and develop realistic cost information before construction is contracted. Those advantages are not available through a traditional design-bid-build approach. As we summarized earlier, following council's direction, staff prepared and submitted the city's application to the PRC on June 30th. The application was accepted without any requests for clarification or additional information, and staff presented the project to the committee on July 24th. The city's presentation team included Public Works Director Julie Underwood, Deputy Director of Parks John Lloyd, Parks Planning and Development Manager Mariah Gill, and myself. We were supported by Turner and Townsend-Heary, serving as our owner advisor, and Pacifica Law Group, serving as legal counsel. After our presentation, questions, and discussion, the committee unanimously determined that the project satisfies the statutory requirements of RCW 3910 and approved the city's request to use progressive design build. The committee provided positive feedback about the city's preparedness to administer a progressive design-build project. They commended the training completed by staff, our use of an experienced owner advisor and legal counsel, and our efforts to build relationships with peer agencies experienced in progressive design-build and aquatic facilities. Overall, the committee described the city as well-prepared, said this was a good use of public money, and commented that we had picked the right project for progressive design-build. And Stacy will take the next slide.

Thanks, Annika. So progressive design build protects the value of public dollars. In a couple of ways, so best value selection, this gives us the opportunity to select a team that is most quality or not best value qualifications based best value selection. So it gives us the opportunity to select a team that is most qualified to deliver the project both both technically and from a process perspective. And that also includes specialty subcontractors and subconsultants. So that's especially applicable to this project with the pool systems. Those are very special in nature and will take the right team to deliver the project well. It's also based on transparent costs. We'll start working with the team early on to develop exactly what the scope is of the project and what the costs are of the project and it's developed in what's called an open book nature and that's contractual. So everything that the contractor team is working on early on in the process is shared with the owner team transparently. So the sub numbers that they're getting from potential partners, Their backup to all of their information, all of the details are there, so we as a team can evaluate it and understand if that's good value to the project, and we can also use third party estimators to review that and help understand that as well. And then market competition, so the design builders selected based on qualifications that subs. be selected on qualifications or through competitive subcontractor bidding so we get to have some flexibility in how they're brought on but there is um there will be some competitive bid packages and so we know that we're getting the best value there and this is also the delivery method that gives us the best opportunities to incorporate omwbe businesses and that's by being able to create the right packages and make sure that we have them and also the contracting is open so we're able to select them in this process. Moving to my next slide. So this is a big kind of overarching timeline of the project and what it's intending to show here today is contract milestones and when we'll come back to see you. The blocks are milestones that represent either the first one, procurement, and contract phases. So we sign one contract in Progressive Design Build at the very beginning, and it is for an initial phase of service. And then there are amendments that go with that. So the next time we would come back to see you, we've got our dots that represent council visits. It would be around December, so as soon as we get done with procurement, and I'll talk a little bit more about that process on the next slide. And that would be to approve award of the contract for the initial phase of services, which is called validation, and we anticipate that to be two to three months. And then we would come back again for approval of the next contract phase, which will likely include the early work package that we've talked about, being able to do some of the things that need to be done on the pool prior to opening for next season, along with the balance of design for the project. And then toward the end of design, we come back with what's called the GMP amendment, and that is the amendment that enables construction. If we're successful here tonight and you're compelled by our request to use progressive design build, the next step would be to move into procurement of the project. And so on a progressive design build project, what that means is it's a two-step qualifications base selection. First step being issuing requests for qualifications. In response to that, we would receive statements of qualifications from proposed design build teams. Anyone who's interested can submit statement of qualifications. Selection committee reviews those qualifications to establish a shortlist. The shortlist then receives the RFP for the project, request for proposals. In that phase, the team is developing a management plan where they're telling the three teams who are shortlisted, typically three, a management plan that talks about how they would approach delivering the project for the city. During that period, step five there, we would hold interactive meetings, and these are unique to progressive design build, sort of similar to an interview. They're just set up a little bit different, and that's what makes them unique in progressive design build. And we receive those management plans after those interactive meetings. Evaluation committee then evaluates the second step management plans, scores all together, and then you have a parent... a high scoring proposer that you'd go into contract negotiations with. Once we established contract terms, that would be when we'd come back for that initial contract approval.

Because, excuse me, because the city has not yet established a standard process for council oversight of progressive design build projects, staff is proposing a series of decision points that we believe will provide meaningful council oversight throughout the project beginning tonight with authorization to procure a progressive design build team. After tonight, the next recommended action would be the approval of a of the design-build contract following the selection of the progressive design builder, which is the process Stacey just outlined in the last slide. This is currently anticipated in December of this year or in January. At that meeting, we would summarize the procurement process, present evaluation results, and request authorization to execute the contract. After that, staff anticipates completing the validation phase, which confirms that the project's scope, budget, and schedule remained aligned before moving into full design. Staff would then return to council, which we're anticipating in March, with confirmation of that alignment and a request to proceed with full design development and preliminary design concepts for the replacement activity pool we anticipate bringing to you at that time. then authorization to proceed with any recommended early work packages which would be work before we open in the summer season for 2027. finally before major construction begins council would be asked to approve the negotiated guaranteed maximum price gmp for the full project at that time we'll present the results of any independent cost validation and confirm that the proposed price is fair and reasonable before requesting authorization to proceed with construction. As we've discussed, these contract amendments are a normal and expected part of progressive design build. As the project advances from design ultimately to construction, the contract is intentionally amended to authorize each new phase of work. These planned milestones in the delivery process should not be interpreted as change orders. So, and then next slide. So today's recommendation for this evening, staff recommends that council authorized staff to proceed with procurement of a progressive design build team for the Peter Kirk pool project and direct staff to return to council for approval of the contract. Approval of tonight's motion allows the staff to begin the competitive procurement process. and we will return at each major milestone that we've just outlined. And that concludes my presentation. Thank you for your time and consideration, and we'd be happy to answer any questions that you may have.

Thank you, Annika and Stacey. Council, any questions, comments? Deputy Mayor.

If there were no questions, I was going to get us started with a motion.

That sounds fine.

It looks like Council Member Falcone does have a question for staff.

Council Member Falcone, go ahead.

Thank you, Madam Mayor. I just wanted to mention thank you for, I don't remember who mentioned, but mentioned the kudos that we got on establishing a network of peer agencies. And I just wanted to call out and thank Ryan Buck of the Lake Washington School District in particular for their work on that, because that's something that I know we've learned a lot from their expertise. And we really value our partnership with the school district.

That's all. Thank you. Thank you. Deputy Mayor, back to you.

Well thank you. So I'll make the motion. I move to authorize and direct the City Manager or designee to proceed with the Progressive Design Build procurement process for the Peter Kirk Poole project and return to Council for approval of the contract with the selected Progressive Design Builder.

Second. It's been moved by Deputy Mayor Black second by Councilor Falcone to move forward with the Progressive Design Build. Any further discussion. All right. Well, I just want to thank everybody for the good work. And I'm excited to start this project. So all those in favor in the motion on the table, please say aye. Aye. Any opposed? Motion carries 7-0. All right. We are moving on to our next item, which is the Draft Tool Library Implementation Plan, City Manager.

okay thank you madam mayor um so the goal tonight is to present you with the draft response to the rfp we had which the staff deems as being a draft implementation plan for the two library looking for council direction on whether you would like us to proceed with discussions with the proposer or if there's any other information that you have that you need instead so to give that presentation is adrena campbell our government affairs manager

Thank you, City Manager. Good evening, Madam Mayor, Deputy Mayor, and members of the Council. Happy to be here tonight to provide an update on the draft implementation plan. I have nine slides, beginning with a brief overview of the project background. We'll then go over a few key pieces of the submitted proposal, and we'll conclude with a handful of policy questions that are also outlined in your memorandum. And while my presentation is less than 10 slides, there's quite a bit of info, Feel free to raise your virtual hand or your real hand. I can see all of you. So I will pause to answer any questions that come up prior to the final policy questions slide. Okay, beginning with a little background. Council had expressed interest in exploring a community-operated tool library in years past and included objectives in both the comprehensive plan and sustainability strategic plan related to circular economies, access to hand and electric tools, and reuse of building materials. Staff met with the operators of the Seattle and Shoreline Tool Libraries to better understand what it takes to launch and sustain a successful tool library. And based on those conversations, staff estimated approximately $100,000 would be needed for startup, which council then appropriated in the 25-26 budget with a condition that an implementation plan be approved before any funds were released. So with that, in March, staff hosted an information sharing interest gathering event featuring Seattle Reconomy's executive director to introduce the concept and discuss what it takes to operate a successful tool library. And recognizing that volunteers are essential to a successful library, staff invited representatives from community organizations, volunteer groups, educational institutions, environmental organizations, business organizations. A total of 123 individuals were invited and 19 people attended. So in May, staff came to Council with a draft scope of work and incorporated Council's direction into it and issued the RFP shortly after. We received one proposal, as the City Manager mentioned, from the Eastside Tool Collective. And while the RFP was open, staff took the opportunity to gather additional community input at the Recycle Right event, where 70% of respondents indicated they would be somewhat or very likely to use a tool library. But a big caveat, you know, we recognize this isn't a statistically representative survey, but it does provide another indicator that there is community interest. Respondents also identified location and the variety of tools as the two most important considerations. So before discussing the proposal itself, I want to demonstrate how staff has incorporated the direction Council provided on May 5th into the scope of work that was included in the RFP. So starting at the top, First was liability insurance. Staff worked closely with the city attorney's office and the Washington City's Insurance Authority, which is the city's insurance authority, to ensure the insurance requirements included in the RFP appropriately protect the city. Second, a preference for non-city owned location. Staff revised the evaluation criteria to give preference to proposals recommending a non-city owned location. While the proposal we received outlines both the city owned and non-city owned option, that preference was reflected in the solicitation. Third is limited city involvement. The draft scope of work first brought to council had a greater level of ongoing staff involvement and staff revised that to narrow city staff involvement to initial volunteer recruitment and marketing on city social media with ongoing responsibility for operations remaining with the operator. Fourth was limiting the city's financial commitment. Staff is not proposing any funding beyond the $100,000 already appropriated by Council, and any future spending would require separate Council action. And finally, Council directed staff to develop an implementation plan before releasing the $100,000, and that's the purpose of tonight's discussion. If Council agrees this proposal provides a sufficient framework, staff would use it as the basis for negotiating a final agreement, which would return to Council for approval before any funds are released. With Council's direction, we incorporated that feedback into the scope of work, issued the RFP, and reached out to all 123 individuals who had been invited to that earlier information sharing and interest gathering event to let them know. Okay, I want to pause here. Are there any questions before I jump into the proposal that was received?

Sorry. Council, any questions on process? Andrea, go ahead.

Thank you. Alright, so as you mentioned, the city received one proposal from the Eastside Tool Collective. Staff believes it is responsive and meets the requirements of the Council approved scope of work. ETC Eastside Tool Collective is a coalition of Kirkland residents who intend to form a Washington nonprofit and until that nonprofit is formed would operate under the fiscal sponsorship of the South King County Tool Library. This proposal maintains that the city would not own or operate the tool library and states that the city's role would be limited to providing one-time startup funding, assisting with identifying location, supporting initial volunteer recruitment, and helping promote the program. Responsibility for implementation, operations, staffing, programming, and long-term financial sustainability would remain with the operator. Okay, the proposal represents two possible facility options characterized as track A and track B. Track A would utilize a portion of the fire logistics building and track B is a containerized model with the location still to be determined. At this point, staff has not completed due diligence on either option as draft implementation plan was requested by council before deciding whether or not to proceed. But staff is recommending that if council elects to continue forward into negotiations, that both tracks remain under consideration because additional due diligence is needed before we can recommend one over the other. The proposal includes many of the operational details outlined in the RFP, including a membership model, borrowing policies, and an online reservation and inventory system. And as previously mentioned, staff worked with WCIA and the city attorney's office to ensure the insurance requirements were appropriate, including naming the city as an additional insured and providing proof of insurance within 10 days of contract execution. The proposal also includes borrower agreements, liability waivers, safety training for higher risk equipment, and routine inspection and maintenance procedures. The city's financial commitment remains limited to the original $100,000 appropriation. Any additional funding would require future council approval. Long term sustainability would be the operators responsibility through memberships, grants, donations, workshops and other revenue sources that they deem appropriate. That is the extent of the background and update to Council on the draft implementation plan. Tonight we're looking for Council's direction on these policy questions. Madam Mayor, I'd like to turn it to you for discussion, beginning with the first bullet.

Thank you, Andreana. So Council, the first bullet is, does the proposal provide enough information as a draft implementation plan to start negotiating agreement? And if not, what specific information do you need?

Council member Arnold. Thank you, Mayor. I just wanted to comment. I don't have any information that I need here. I really did appreciate the amount of research in detail in the Eastside Tool Collective proposal, including the work that they've done to learn from and coordinate with existing tool libraries. The fact that they're matching a lot of this will allow for economies of scale and both for how they coordinate a Kirkland tool library with these others, or perhaps expand throughout the east side. So I was impressed and believe that this draft implementation plan provides a level of detail I was looking for. Thank you.

Great, thank you. Council Mayor Paschall, I had you next. Did you lower your hand? Yes, that's a yes. Council Mayor Prim.

Yeah, I just want to say also just thank you to the team that initiated this initiative, I think, and for working so hard in trying to get a tool library into our community. I think the ETC proposal actually had a lot of really good information and details. And so I honestly don't think I need any more information. I think the ETC proposal is sufficient to begin negotiations. and i think negotiations at this stage will really provide and refine a lot of the details identify any risks and really ensure this that the city interests are fully protected including um because i just want to comment on this the prior comment that was made about the south uh king tool library as an appropriate fiscal sponsor i think as part of the contracting process i think that those things will be evaluated um but yeah i think at this point just getting uh the negotiation started is the appropriate next step great thank you counselor thank you mayor um are we are we voting on anything tonight then or are we just offering comments and direction

if council wanted to decide between track a or track b we would request that that is done through motion but other than that we're not requesting a vote okay well um sorry i'm just sorry interrupt i do think you would want to motion authorizing staff to proceed with negotiations thank you whether or not you're choosing the options or not yeah sorry city manager you raised your hand i'll try to do that next time

So Councillor Pascal, we will be deciding whether to move forward with negotiations.

Yeah, so maybe I'll just save my comments for the discussion on that. You know, once we have a motion there.

OK, alright, city manager, go ahead.

And I just I guess it's just want to follow up with that to say that and the intent is to bring a final deal back for Council review. So permission to proceed today is not still saying yes to the

Thank you for that clarification. Any more comments on information needed for the draft implementation plan? Councillor Falcone. Thank you, Madam Mayor.

I was just raising my hand because I was ready to move on to the next question if we were.

It looks like everybody else is, so go ahead.

Great, thank you. Well, first, I agree with my council colleagues' comments. Thank you to staff that have been working on this to community members who have expressed just so much interest in this project and also to the Eastside Tool Collective. I know it took a lot of work and I also agree in response to the first question that there was a lot of really detailed information. You can tell they did their homework and obviously we'll make sure as a city that we do our due diligence to make sure every T is crossed and I dotted to make sure that this is a successful facility. Reading the memo, it was really clear to me that between track A and B, track A seems to be the clear choice to proceed with because it results in a better facility, a better quality facility for the community, and it's less initial setup cost, right? And so to me, that seems a clear option. And so I'm ready to make a motion whenever you're ready, Madam Mayor, but I'm also happy to wait if you want more discussion before motions on the table.

Deputy, or Council Mayor Arnold?

Yeah, just a discussion on this particular item. I really appreciate the description in the implementation plan of the advantages of using the fire station. This is a facility right now currently that's simply being used for storage. And I support examining whether it could be used on a temporary basis for the tool library. But um want more staff input on the impacts of that and uh information on how long that temporary could be given the city's medium and long-term plans for this particular building so you know i'd like to i see the value in keeping both tracks in consideration but unless staff comes up with more COMES UP WITH ADDITIONAL INFORMATION THAT SAYS THERE IS A BETTER USE OR AN IMMEDIATE NEED FOR FIRE STATION 27. I REALLY LIKE THE IDEA OF USING THAT ON A TEMPORARY BASIS IN THE NEXT COUPLE OF YEARS. THANK YOU.

THANK YOU. DEPUTY MAYOR, BEFORE I CALL ON YOU, I'M GOING TO LET CITY MANAGER RESPOND.

AGREED. So the only thing I wanted to add is part of the reason that staff, particularly me as a city manager, recommended keeping both tracks going is, as Honoranda mentioned, we haven't done a ton of due diligence. There is capacity in Station 27, and there is some exciting opportunities to co-locate. But we haven't explored, for example, I'll just make up two examples that may or may not be the case. If the city had a condition that the Eastside Tool Collective felt was too restrictive, we might want to make sure we have the opportunity to look at another option. So for example, if they said, we need a minimum five year commitment for the station, which they haven't said, and we said, Sorry, we can only give you a two year commitment, we just want us so ability to say if this isn't the right place, or if something new develops, I mean, they give you 30 days notice to get out and they were to say, that's not sufficient notice. We just haven't had a chance to really sit down and explore all those issues yet. And so it is highly likely to reach an agreement on station 27 but there are certainly some possibilities i can envision where their expectations for the site and our expectations may not quite align and we might want to know that we've been exploring others at the same time so that's the only reason staff has proposed to have the two tracks deputy mayor well thank mayor um i'm not going to add anything to what

City Manager just said, but I do want a plus one, Council Member Arnold, that I think track B might be the right direction to go, but before I make that final decision, I definitely want as much information as I possibly can from staff. And it sounds like City Manager is prepared to provide us that as part of next steps and the negotiation. There is one more bullet point, which is, is there anything else Council wants to see in the agreement? It's not so much what I want to see in the agreement, but you know, I did want to, I assume that as part of any proceeding to the next step and further negotiations, you know, staff is going to be looking at proof of incorporation, proof of Structure and ownership and 501 C3 status. Insurance certificate of insurance naming Kirkland is additional shirt. All of those things are. I assume and I guess this is the question for staff. I assume are part of this next step. Part of these discussions. This negotiation and before there's a final agreement, all of these boxes will be will be checked. Is that fair?

That is absolutely correct, Deputy Mayor.

Great. I don't have anything else to add. Thank you.

Thank you. I'm going to go back to Council Member Falcone.

Thank you, Madam Mayor. I have a question for the city manager just about next steps. So obviously, I think we're hearing that the strong preferences for track A and track B kind of as a last resort, if nothing else can work out. So my question is, what are the planned next steps? If we approve, adopted a motion tonight to ask staff to go back with both options still on the table, are you then coming back to check in to say, this is more information on the two options and which one do you wanna pick? And then we make another motion to say, bring us back in a final agreement with one of those, because I assume the final agreement will take some work after, we give you direction on which option, right? And so how much more work does that create? Because it was initially my understanding that our motion tonight was gonna be to direct you to negotiate in order to bring us back a final agreement, but it sounds like that may not be the case. Might be another check-in.

well it's a great question so my intent would be to spend the time to figure out a proposal in partnership with etc and bring that back for your approval so hearing the council's preference we'd start with sitting down together at the fire station logistics center what are you hoping to do how are you hoping to do it for how long you know kind of how does all this work and then the city staff assessing not just their proposal but what are our needs so i could just give an example if if we're each using half the fire station, there's a big event, how do we ensure that none from the public goes into the fire station side of things, right? So do we need initial investments like gates or things like that? So there's just a lot of details that need to be worked out. In the course of that discussion, it's possible to run into some things that we can't work out together. I doubt it, but it's possible. And only if they said, no, this isn't enough, it can't work out for us, or we conclude there's something that they've asked for, we just can't give. Would we probably start looking at the other option? But we probably have a couple ideas in mind as we go, but the intent would be to say in partnership with ATC would come to with one option that's agreed to for Council review.

I guess I guess my my follow question related to that is. At what point is it a Council versus staff decision to pivot to option B if we give you authority to go to both right? Because I could imagine there could be a situation where You know, you may think that it's not feasible to move forward with track A, but council may want to say, well, we do want to concede on that thing and we do want to make it happen for track A. I guess that's my question is how will we navigate that? Is it that if we move forward with track A, you don't need another check-in point? But if you think that you need to go with track B... Then you come back to Council for authorization for Track B. I just feel like it's a big step to say, you know, do whichever one you want, right? And then I would hate for you to come back with Track B and say, well, actually, you know, we want you to push harder for Track A.

Right. I mean, thank you, Council Member McGowan. I hear you. So, no, the goal... The goal is not for staff to decide. The goal is we've been given direction and that the preference has been expressed and to go see if we can work something out. I guess what I would say is if I felt like I hit a place where there was several fatal flaws or something the council need to be aware of, before there was the pivot, I would come back and say, hey, here's the two sticking points we reached. But in the meantime, we've done a little bit of due diligence about what the alternatives might be. It could be here, it could be here. So that if you have that information and you are getting the same information about the fatal flaw, you'd at least know what the alternative might be. But no, the goal isn't that we would just say, hey, tomorrow I, city manager, have decided it's track B and that's what we're going to talk about. Right. But as I said, because we were trying to really respect the council's direction that you have not made a decision to go ahead and you hadn't made a decision to use the fire station logistics center. We just haven't done all the due diligence we need to to make sure it works, right? And in partnership with the Eastside Tool Collective. So we just need some time to work through that. But I think we'd come back if we said, here's two hurdles. Do you want us to jump them or not? And here's the pros and cons of it.

You know, we would definitely do that before we gave you a final decision.

The final decision will be yours no matter what, because you'll get the final agreement for your approval. Thank you.

are you done okay city manager so would it help you to follow up on councilman falcon would it help you if we were clear on what our preference is okay Okay. Thank you. Council Member Prim.

Okay. And I think I can answer that question directly now. So I do support keeping both options on the table, but definitely prefer Track A. I think it's just a cleaner look, easier access points. And I think overall it just seems more straightforward. So I definitely would prefer Track A, but definitely open to both depending on where the negotiations land. And then the last question of just what the final agreement, just things that we would want in the agreement, I would say just clear performance expectations, a payment schedule also based on milestones. So I don't think the intent is that we would be you know sending a hundred thousand dollar check right it would be based off of certain milestones over a period of time and then um just financial responsibilities and then defined exit or modification for provisions if the program for some reason does not uh achieve like the outcomes that that we want

Thank you. Councilor Pascal, we are going to negotiations. So did you have some things you wanted to share?

Sure, I mean, I have a problem. I have overall comments on waiting for the motion.

OK, Councilor Prem your hand is still up. OK, Councilor Tim Chisholm, did you have something you want to say?

Is somebody making a motion?

I'll go back to Council Member Falcone for the motion.

Thank you, Madam Mayor. And bear with me as I try to modify language on the fly to... Wait.

Before we get to a motion, I had a quick comment responding to Council Member Prim's comments.

Go ahead, Council Member Arnold.

Okay. Council Member Prim has asked about... whether the city's contribution is delivered as a lump sum or some form of progress payments. And that's something I would like some more information about versus giving direction for One Direction or not. We've had some previous experience in seeding some nonprofits like the Kirkland Community Foundation and And more recently, East Trail Partners, where Kirkland and other East Trail members made contributions to start that organization. Both organizations have been successfully launched and are now self-sufficient and provide more value than the initial investment as we had hoped. And so I think we have a successful model. I'm just curious how we've handled that model in the past and whether it's just been, okay, here's your initial

seed money and your reporting obligations go ahead c major you know the answer it really depends on each case in every case there has to be an agreement right a legal agreement that shows the public benefit the city is receiving for the money that's provided and so cases like you've mentioned for example with the community foundation the agreement had it paid out over a three-year period and an expectation that other fundraising occurred in other examples we've given things directly to like the east trail it really depends on what we sit down and negotiate so i think the staff's initial intent was not just to say here it is up front but to have an agreement that set out milestones reporting but we also haven't sketched that out yet so council feedback on that I would be very helpful if there's things you prefer or things you don't prefer, but typically would just give it all up front in one lump sum. Without a specific set of outcomes, I'm going to be cheap.

OK, thank you city manager. I think that addresses my objections and would support whatever comes forward through negotiations in the agreement with. What you see is fit for protecting the city. Thank you.

Thank you. Anyone else? Council Member Falcone.

Thank you, Madam Mayor. I move to authorize staff to proceed with negotiations based on the tool library implementation plan and to return to Council with either a proposed contract for consideration of track A or a check-in with Council to consider proceeding with track B if track A seems infeasible.

Second. thank you and good job pulling that together um and city manager agrees it's been moved by council member falcone i'm not going to repeat that second by council member prim council mayor paschal all right yeah yeah i have um some thoughts on on the discussion that we've had so far and i want to speak to this motion um but first i just wanted to thank

staff for all the work you put into this and I want to start by also emphasizing that you know I do think a tool library does seem like a good idea and but the concerns I want to talk about regarding this concept really are how the cities roll in it and so the first thing is I honestly don't wasn't convinced that it was a financially sustainable proposal we only received one proposal and and its financial plan relies heavily on a variety of unsubstantiated assumptions. I don't see evidence that outside funding has been secured. And before investing taxpayer dollars, I really do think we need greater confidence in this organization, that this organization can succeed and has secured financial backing and support already from other community organizations. And I say this because It's my understanding that the Shoreline Tool Library was funded by the Washington Department of Ecology, King County Solid Waste, and the cities of Shoreline and Lake Forest Park, four entities. Here we have one city alone offering $100,000 with no other committed financial backing. And so I think to limit our risk, we really should require additional financial backing from partner organizations so our money is matched against other money. I still have a lot of concerns about the city's long-term commitment. I know that there's language in there about not needing more money, but the RFP intentionally favored proposals that did not rely upon city property, yet the preferred option in our discussion here so far still focuses on the fire logistics building. I think that this is going to create additional public subsidy that's not reflected ongoing costs. It's going to raise questions about city space needs liability maintenance and other ongoing resources. And then finally one subject that hasn't been talked about that I've heard and that I feel is I really have concerns about whether this process has been above reproach. When public funds are involved decisions really have to be fair but they also must be perceived as fair. And a former council member participated in budget decisions that funded this program including a vote to approve taxpayer dollars in last December and is today the primary contact on the only proposal we received. I think that puts us the entire council and staff in a difficult position. These relationships require an even higher level of transparency and scrutiny I believe. It also raises the question whether we need to be looking at our code of ethics and whether that should be updated to designate a waiting period after someone leaves office before they can lobby council or staff on behalf of a client or organization. I believe this situation does raise some ethical concerns with the public and it makes me as a council member very uncomfortable. But I know I'm in the minority on this that others majority isn't going to agree on any of what I said. But I would request the following. One, that we require additional committed financial backing to show that this is a real proposal. I'm not in support of Track A. But if that moves forward or before that moves forward, I'd like to understand and do a full review of our space needs as a city. You know, there were some questions raised in public comment. um you know i i don't i don't unders it sounds like the site tool collective is not a legal entity and is going to be sponsored by the south king tool library so is that is that a legal arrangement is that going to work for us and is that other entity in good standing with irs or you know is there other issues there i think we need to look into that and make sure um and then finally you know at some point and not now but later we do need to look into our ethics code about of departed council members. We have a strong ethics code about existing and sitting council members, but we also need to think about once council members leave office. Many other organizations have that actually, other cities and counties. So those are the things that are on my mind right now with this proposal. Thank you.

Thank you. Anyone else? Deputy Mayor.

Thank you Madam Mayor. I want to speak up on just two things. One I realize I misspoke earlier. I think my comments were clear. I meant track A and I meant that my comments were you know I do want to make sure that as we evaluate track A as perhaps the the primary track that we do get as much information as we possibly can from staff about what that will mean. I don't think I don't think a full review of our space needs is realistic. That would delay implementation for a very long time to do a full some kind of full strategic plan on all the city space needs. But we all I think we're I think staff is hearing that we all want to make sure we understand what the impacts are of of track a and use of of station 27 on at least our near-term um space allocation um my last comment is um and i'll look to city manager city attorney but you know i fully expect that any negotiated agreement we're going to have reps and warranties we're going to have covenant financial covenants um we're going to have all the sort of standard clauses and protective clauses that are going to ensure that the organization is incorporated, that it has the financial backing it has represented that it will have. So I look to staff to do that diligently and proficiently in the next stage. And I'll be curious to see what that looks like when it comes back. But I think you've heard that we want those protections, but I also know that THAT'S THE KIND OF THING THAT STAFF WOULD BE DOING AS A MATTER OF ITS PROFESSIONAL PROFICIENCY. THANK YOU.

THANK YOU.

COUNCIL MAYOR ARNOLD. THANK YOU, MAYOR. FIRST RESPONSE TO ONE OF THE POINTS THAT COUNCIL MAYOR PASCHAL BROUGHT UP. THE WHOLE PROCESS OF STARTING A NEW 501C3 It's fairly common. I was involved in this with another organization where there is an existing 501c3 that provides the fiscal sponsorship. And what that allows is for tax-deductible contributions to go to the new organization as it gets set up with its own approved 501c3 status. It is in the Eastside Tool Collective's interest in ensuring that their fiscal sponsor is in good standing because that allows them to do fundraising, private fundraising that's tax deductible. So I'm confident that whatever questions that came up during public comment at our meeting tonight can be addressed. Secondly, to wrap up, I did conversations with council last week at OO Denny Park. And while the proposal from Eastside Tool Library includes some people that have been very involved in the community and former Councilmember Sweet that have been passionate about this and wanting to put this together, I also had three people come and want to talk in support of the Tool Library with me during conversations with Council that were um the people that that programs target that these were people that we hadn't seen before uh that people that i had uh just met for the first time that were excited about the opportunity and so i'm um i i think there is support for this and i'm excited to move forward thank you thank you councilman tim chisholm uh thank you

Um, in evaluating this proposal, I looked at three factors. One was community support. The second was financial sustainability, and the third was the process. I was told months ago that neighborhood organizations in the Kirkland Association of Neighborhoods. We're going to be supportive of this and offer. Letters of support. I haven't seen that materialize. On May 5th, I also received an email from the chair of the Kirkland Community Foundation. That email was in his official capacity. And represented that. In his official capacity that there was support for the tool library. The subject of that May 5th email was statement in support of tool library in Kirkland. That led me to believe three months ago that the Kirkland Community Foundation was deeply involved in this, that they supported it, and that there would be community support and likely financial support coming from the community foundation. Yesterday, I clarified this with the executive director of the Kirkland Community Foundation, and she clarified, that the Kirkland Community Foundation has no formal position on the tool library. They have pledged $0 and they have contributed $0 to this tool library. I also looked at the financial sustainability of this model and I've noted that they have not yet raised any money. They have not yet sold any memberships and they do not yet have any money in the bank as far as I know. Their business plan includes $42,000 out of our $100,000, which would potentially be spent on the salary of an executive director of a tool library. I believe that when we started this, this was generally going to be a community-driven thing by volunteers and not that we were needing to spend almost half of the money contributed on the salary of an employee um i don't think 100 000 will be the end of this i think we will get a lifetime subscription of supporting this tool library because i haven't seen any evidence that they have financial support i also looked at the process by which we followed we have one rfp response and no others. Council Member Paschal's concerns about the ethical implications of this and the perception that the community will have are directly on point and right on target. I have serious concerns about moving forward with this. I think that the idea of a tool library is a good one, and I appreciate staff's work on this. But this is not currently investable. It's not currently ready for an infusion of capital. I support either terminating. This project or I support moving forward with additional. work to get additional RFPs proposals. We should be able to select from three, five, or more RFP proposals from a broad selection of organizations that are qualified to do this. The appearance of one RFP proposal does not, in my opinion, look proper. I'd like to see more RFP proposals if we're serious about this. and I will be voting no on this motion. And the tool library as a concept is one which I think is worth pursuing, but with one proposal, I think the best option right now is to move forward with soliciting other proposals from other organizations so that we have, several qualified organizations to evaluate. Thank you.

Thank you. Deputy Mayor.

Thank you, Madam Mayor. I just wanted to speak up one more time in support of the motion and address some of the comments from my colleagues. I appreciate this conversation. I do want to note that if you are planning to form a 501c3 corporation, it's not going to become a surprise that you are not going to raise money until you have your 501c3 status, and those contributions are indeed tax deductible. I'm not overly concerned about funding a position within a A project like this. We did that with the Community Foundation. We supported the executive director salary, so we've done this kind of support in the past with organizations, including earmarked to support individual staff. And we don't always have the benefit of multiple RFP's with East Trail with the Community Foundation. They were the organizations that. Had stepped forward to deliver on the goals and objectives that we're going to deliver community benefits, and that was in the absence of any RFP. Sometimes you put out an RFP and you just you do. In fact, I get the one response and then when that happens, you evaluate that response on its merits, which I think we're doing in this case, including. Directing the staff in many ways to make sure that they are doing their their their taking a diligent approach to these negotiations. So I appreciate that. And then I was trying to think if there's any other points that I wanted to make, but I think that covers it. Obviously, I will be supporting the motion to proceed with the next step. Thanks.

Thank you.

Councillor Primm. Yeah, I just had a very quick question for city manager or legal. So in the agreement that we have, and I just want to address this whole financial sustainability issue that Council Member Pascal and Tim Chisholm have brought to light. Is there a way to tie the tie the milestone payments, for an example, or have some arrangement within the agreement itself so that we are only paying out funds when we know or have some confidence that the entity will be financially viable or that we're getting external support or that they are getting external support.

You might answer, then the city attorney can. So the short answer is yes. I would say, I guess, two things. One is at least the way the council appropriated the money and the conversation was that the intent of this money was to be startup money. So it's not year three money once they're going. However, having said that, I think the intent of the staff is to say, what is your plan? How is the fundraising going? And set milestones and reporting requirements. so i think it is our intent to have an agreement that is helping ensure it's financially viable and so doing our due diligence on that but i do think there's clearly an intent at least of the council that this is helping in that right and so it's a key starting point whether that's for staff or whether it's for startup costs or book purchases and so forth it's to help them get off the ground but i think we would be looking very carefully at their next steps particularly based on council feedback but also our own due diligence is now that you know we got the go-ahead which to date they hadn't been given you know what is your fundraising plan and how successful is it being we have a few months to figure that out while we negotiate the agreement so um it'd be my intent to help report on that when we come back to you and say it's the last three months since you last saw us here's what's happened and here's how we feel good about it or don't okay thank you appreciate it okay anyone else

All right, I'm gonna take a shot at this. I will be supporting the motion. As Council Mayor Arnold was clear, there is a lot of public enthusiasm for this and we have been talking about it for years and I think it'll serve the community well. I am in support of, I have a preference for Fire Station 27. I agree with Deputy Mayor that we do not wanna slow down this project while we do a strategic, plan for long-term use of our public buildings, but I do feel like we need a plan. We have a number of buildings that we are bringing online, and I would like to see how all that space is going to be used over the years. And that's including the buildings that we're exploring for public works. And I want, I need, I feel I need to respond to the criticism of community leaders that have served our community for decades. The allegation that there's an ethics violation, this money is not going into anyone's pockets. These are people who have bent over backwards to serve our community in many, many capacities, and I'm grateful to them. for championing this project, for taking their own personal time to put it together, to rally the community, to get feedback from the community. I think they've done a good job, and I don't think it's fair to criticize them for it and make any sort of allegations.

Well, you don't get the last word on this. If you want to retort, you don't get a retort. You don't get to use your own order in as chair to retort.

Council Member Tim Chisholm. I have waited until I spoke last. Councilmember Tim Chisholm. So I have finished my remarks and if Councilmember Tim Chisholm, I see Councilmember Prim would like to raise her hand. Thank you, Councilmember Prim. Councilmember Prim, did you have your hand up? All right. OK, the question is on the motion made by Council Member Falcone, second by Council Member Prim. Council Member Falcone, will you do us the favor of repeating your motion?

Would you like me to repeat it?

Council Member Falcone, you're muted.

Thank you. Yes, City Attorney, that would be wonderful. Thank you.

I'll repeat that for you. She made a motion to authorize staff to proceed with negotiations based on the tool library implementation plan and to return to council either with a proposed contract for consideration that uses track A or a check-in with council on track B if track A proves infeasible.

All right. Thank you, City Attorney. All those in favor, please say aye. Aye. Aye.

Aye.

All those opposed?

No.

Motion carries 5-2.

Thank you, everyone. It is now 9-17. So we're going to take a break and we will be back at 9-30.

Sorry about that. It took me a second to get logged back in. All right. So this is our check-in on affordable housing on faith-owned land. Look at our council direction tonight before we go back to the Planning Commission. I'm here to walk you through our draft code proposal. It's Austin Zyke, our Deputy Director of Planning and Buildings.

Thank you city manager and good evening mayor, deputy mayor and council members. We're here tonight to give you our second briefing to you on the affordable housing on faith owned the land project. This is a task on the adopted 2026 to 2028 planning work program and its intention is to implement state legislation that the city is required to comply with. I have 10 slides of information for you tonight. Before I jump in, I wanted to note that our lead senior planner on this project is Scott Guder. Scott's not able to be here tonight, so I will do my best to represent the good work that he has done on this project. We last talked to you about this project back in May, and at that time we asked you for some scoping direction. At that time, Council told us to base any density bonuses given to faith owned land that's providing affordable housing to base those bonuses on underlying zone standards where those faith based properties are located. You asked us to provide a buy right permission for those bonuses. Planning Commission iterated on the council direction and emphasized that the code amendment should add flexibility, but to keep the increases fairly modest, particularly in low density zoned areas. Since we talked to you, staff has been out doing quite a bit of outreach, primarily with faith-based organizations and also with consortiums and organizations that represent multiple stakeholders, whether it be faith-based organizations or affordable housing developers. We've also been coordinating very closely with ARCH on this project to help understand some of the market and feasibility context that goes into providing Developments that include a high percentage of affordable housing units that are income restricted. From that outreach, we really heard a few things, and you heard them already tonight in your public comment period. We really heard from faith-based organizations that they would appreciate a very straightforward process. Both them and affordable housing developers appreciate flexibility. That's really key, given that affordable housing, especially when provided as a higher percentage of a total development, is difficult to make feasible in this market and always so flexibility was really key for a lot of them from the faith-based organization specifically they did iterate what you heard earlier tonight that they aren't affordable housing developers in and of themselves they really don't hold that expertise inherently and so also noted that there will be a need for some support beyond code amendments programmatically And with that feedback, we really took that to heart and tried to incorporate it into our code amendments presented to you tonight. And I'll talk through how we did that in the code amendments in just a moment here. Before I jump into a summary of the code amendments that were included in your packet, I did want to note, just go over briefly, a map of the existing faith-owned properties in Kirkland. So there are 37 organizations we found that operate in Kirkland today. Those 37 organizations own 64 total parcels for a total of 160 acres in the city. Many of those parcels are quite large, and you can probably think of them. So 19 of them are more than two acres, and a lot of those faith-based organizations that you see actually own several underlying parcels that comprise one subject property that they may be operating at. A little over half of those parcels exist today in low density residential zones. Just a couple of them are in medium or high density residential zones. And then the remaining approximately 40% are in zones that already allow a little bit denser development, either office, commercial, institutional, or transit oriented development zones. And then several of the zones This is kind of similar to all of Kirkland, but several of the properties do contain critical areas that would need to be factored into future development. So with that, I want to quickly review what's in your packet. Just give you a summary of the draft code amendments. The draft code amendments would add a new section to our affordable housing chapter in the Kirkland Zoning Code, and they would be based on what the state told us we had to do. So the state requires us to provide some type of capacity bonus for properties or developments that are providing either 50% of their total units at 80% AMI or 20% of their units at 50% AMI. And that's more than we require as part of any of our affordable housing requirements today. So this would be beyond what we require in our current code, and the state requires us to provide some density bonuses for development that's doing that. So as it's drafted, it would only be applicable on parcels that are owned by a faith-based organization. And to put it simply, what we did was we looked at the existing underlying zones and we provided a modest density increase based on the underlying zoning. So we basically took a low density zone and said, what's the average height allowed in a low density zone? And what would kind of an incremental step up to the next densest zone be? And that's how we looked at what their height bonus would be. And the same, we looked at a medium density zone, what's the average height in medium density zones for residential development and gave them an incremental step up to a high density zone. So what that relates to or results in is that in low density zones, we have a few varying heights across the city in those low density zones. We've talked about that a little bit with you before, but on average, a lot of them have a 30 foot maximum building height for residential development today. um under this bonus they would get up to 35 feet if they were providing that that state required minimum amount of affordable housing um and then in medium density they would go from 35 to 40. so a modest height increase lot coverage was another standard that we heard could help if projects kind of become feasible if we were flexible with that and for that one of the things that we focused on was making sure that if an organization wanted to continue to operate that faith-based facility That the standards were flexible enough that they can continue to operate their place of worship and also provide some affordable housing on site. So we factored that into looking at lot coverage and based the bonuses for lot coverage on the lot coverage allowed for that faith-based facility. Some of the other standards that we would propose to give these types of developments are exempting them all from design review. I think it's important to note that low density zones don't require design review today. So when we look at the sites across the city, it's not exempting many sites that wouldn't already be inherently exempt from design review, but these types of developments would be. Also removing where it exists any maximum density. So a limit of units per acre and floor area ratio standards. I know council's gotten a lot of feedback from a lot of housing developers that our floor area ratio standards can be quite restrictive. So removing that for these types of developments. I already talked a little bit about flexible lot coverage. We also propose in the draft code being more flexible about required yards or setbacks. um and then also allowing um for the planning and building director to approve minor deviations from the code so we have heard from the affordable housing development community that projects often need to vary just a little bit from zoning standards it's hard to write zoning standards that cover every situation and so in the spirit of trying to provide a streamlined path for these projects to happen we did add into the code an allowance for the planning and building director to administratively approve some minor deviations if one is needed to make a project work. so the what i've gone over so far is kind of like the base bonus that we would give these types of developments that are providing a high amount of affordable housing units and the next two slides are sort of add-ins that staff is proposing and the first is an first is an additional height bonus and so in the draft code that you've seen we've offered an additional height bonus if a development chooses to provide more than that standard that we covered. So more than 20% of their units at 50% AMI or more than 50% of their units at 80% AMI. if they did that um they would be able to get some additional height so up to a maximum of 50 feet in low density zones and up to a maximum of 60 feet in medium density zones and then up to a 25 foot bonus in other zones i'd note that these extra heights do come with additional setback requirements written into the code so The higher they got above that kind of base bonus, the more those buildings would have to be stepped back a little to mitigate impacts to adjacent properties. And in terms of how this would work, we are still drafting this into our final proposal. But what staff is thinking is that what we would do is require to a set percentage of additional units that would have to be provided for a development to be eligible for this additional height bonus. The other option that staff is proposing in the code is providing an exchange ratio that would allow development to give us different AMI levels in their project, whether they chose to do a variety or a range of units within one project or provide all of them at 40% AMI instead of 50% AMI. We wanted to provide an exchange ratio to give them more flexibility to make a project work or meet needs. or preferences of the faith-based organization that they're working with. This should be a familiar concept to council. You have adopted exchange ratios for several other affordable housing requirements across the city, including in the station area and through the Juanita cars more recently. And so we're proposing that that same concept be applied for this affordable housing on faith-based property type of development. And lastly, in addition to the code, staff has also been contemplating what other support services beyond the code amendments could be helpful to faith-based organizations undertaking this type of development. Our ideas for that, that don't need to be codified, there's something that we could programmatically implement, are offering free presubmittal conferences and perhaps expedited permit review. And then, as I mentioned, we've been coordinating very closely with ARCH and they have a lot of support available to these faith-based organizations in terms of supporting due diligence, helping with feasibility studies, and also kind of connecting people with networks that might help them realize goals if they want to do something like this. With that, with the feedback we get tonight, we will finalize those draft code amendments. We're currently scheduled to take them to planning commission for a public hearing on August 27th. And tonight would love some feedback from council on any of the bonus development standards and also any specific guidance on the concepts of the additional height bonus or the proposed exchange ratios. And with that, I will hand it back to you, Madam Mayor.

Thank you, Allison. You did a great job. So alright, Council any any questions, comments, response to the questions.

Councilman Arnold. Thank you mayor and thank you Ali for the presentation. It you always are so good at. Presenting some very complex topics very easily. I want to make sure I understand some things that I was confused When I first read the memo. When you're talking about the exchange ratios, that's separate from an independent from the additional height bonus for different affordability. That's just something that you're allowing to change the the mix of affordable housing within the development and it would those offer no additional height. Is that how I? Is that correct?

Thank you for the opportunity to clarify, Councilmember Arnold. As it's written in the code that was attached in your packet, those exchange ratios were written in as an option only for the additional units that would be required for the additional height bonus. Since we published your packet, staff is evolving that idea to potentially apply to all of the affordable units required. So that's what we would propose is making those exchange ratios available across the board and would appreciate council feedback on that.

Yeah, I support that. On the additional height bonus, that's an area where I didn't fully understand. Have you set a standard of what you do to qualify for the additional height bonus or are you asking for feedback on the concept and the upper limits?

Thank you for the question. We are looking for feedback on the concept. We've been working, and one of the points we're still coordinating on with ARCH is calibrating that requirement B. Our current thought is that we could do something like an additional 5% of affordable units might make you eligible for that additional height bonus. If there's any upper limits that council members feel strongly about, we'd appreciate hearing that.

OK, great. So I appreciate the answers. um offer my uh feedback overall um i really appreciate the model of zone equivalences versus coming up with some new standards and specifying this is much simpler to understand i appreciate that i appreciate the focus on development by right in the administrative approvals i support what you're suggesting on allowing for the exchange ratios um through uh As part of the affordable housing and I support and not necessarily just as part of a height bonus and I support the upper limits of the height bonuses that you're suggesting and look forward to further discussion from the Planning Commission on what are the right and arch on what are the right requirements to qualify for that. Thank you.

Thank you, Councilman Tim Chisholm.

Thank you and thank you Allison. Where in the process are we on this? And does this was designed to comply with the state law, but does this go back to the Planning Commission now?

Yes, so our next step would be to finalize the draft code amendments and then take it to Planning Commission for a public hearing.

OK. Thank you. I do agree with and support most of this. I think it is logical because this would take into consideration the underlying zoning of the surrounding neighborhood or the surrounding location, right?

Yes.

Thank you.

Thank you. Anybody else? Oh, Councillor Falcone.

Thank you, Madam Mayor. Nothing really new to add. Just wanted to share that I support staff's recommendation and including the exchange ratios applying to all of the affordable housing requirements. And I really appreciate not only its simplicity, but its responsiveness to the stakeholder engagement. So thank you for that. And I'm looking forward to hopefully adopting this in the near future. Thanks.

Thank you, Casper Prim.

Hi, I just wanted to say that I agree with the overall plan here and don't have really anything to add, which is which is rare. Thank you.

Thank you anyone else? Alright, I'm saying I think this is really well done. I think that we've worked really hard to simplify the process as much as possible, both in the zoning and being able to handhold and support the faith based properties. This is very thoughtful. Yeah, it's great. So take it to public hearing. Oh, I did have one question. I appreciate that you brought the faith based property owners in to get their feedback. Did we... Did that include this code? Did they look at this code recognizing that it's not usually they don't read code usually, but did they have a chance to provide feedback on the code?

I don't believe that any faith based organization feedback directly on the code. What we've heard a lot of is that they don't they don't do this and they're not super familiar, but we feel like we've gotten really constructive feedback from affordable housing developers that would be likely partners.

OK.

and i when we but let's do invite them to participate in the public hearing so thank you deputy mayor thank you madam mayor um kind of related to that allison um making sure that we're i was going to ask the same question that that council member arnold asked about sort of the mathematical bridge between the additional affordable housing units pursuant to the ratio or otherwise and the additional height bonus. So when it sounds like we're going to be refining that and when we do, I think it would make sense if we haven't already to get feedback from the development community that does affordable housing development and make sure that what we're thinking about makes sense. So if we're not doing that, I suggest we do. If you're already doing it, great. Obviously, we've got some work to do to figure out that mathematical bridge, and I just want to make sure it makes sense and that 15 additional feet makes sense and 20 additional feet makes sense. Because sometimes we come up with those numbers, at least we as elected officials do, probably not you as planning professionals, And once a developer gets a hold of those numbers, they're like, that doesn't really do that much for us. So I want to make sure we think that through.

Yes. And Scott and his team do have a very direct line of communication on this project with the Housing Development Consortium, who represents several affordable housing developers. So I think they've been great at providing feedback and giving us good checks as we go along.

Great. Thank you.

Thank you. Anyone else? right allison do you feel like you have what you need from us i believe we have what we need thank you for the feedback great thanks so much all right we are going to move on to um briefing on potential affordable housing agreement related to the arete apartment city manager okay thank you this is a potential project uh to create some affordable housing in kirkland that's been going on for several years and we finally have to place that we want to

check in with the council to see if you want us to continue to a final agreement. So we have Adam Weinstein, our director of planning and building, is going to give the presentation. We also have the owner of the project, Arete Apartments, Robert Pantley is here, as well as Angela Rossman. And they're here to answer questions about the project and the agreement as well. So with that, I'll turn it over to Mr. Weinstein.

All right. Good evening. Thanks, City Manager. Good evening, Mayor. Good evening, Deputy Mayor and Council. As the City Manager mentioned, yeah, joined by several folks, Don Nelson, our Planning Manager, Kevin Hansen, our Senior Assistant City Attorney, who helped out with this analysis, and then Connor Hansen, the Managing Principal at SRM Development, Angela Rosman, who's the Director of Sustainable Development at Natural and Built Environments. And then of course, Robert Pantley, who's the CEO of Natural and Built Environments. And yeah, again, we're not looking for a decision tonight, just feedback on whether you want staff to continue working on this agreement and if you have any follow-up questions. And yeah, again, just six slides tonight. Hopefully you can see an aerial photo here. This is really just to provide some context. And this is, I should mention, this is a really extraordinary project that's been instrumental in being part of our affordable housing strategy in Kirkland. So I just want to point that out. RTA is a 290 unit apartment building. As you all know, it's right in the heart of downtown. I'd also note that it's right next to the 111 unit plaza project. And in response to an earlier public comment, The Plaza project was the project that was the subject of an MFT agreement that was city negotiated, not the RTA project that we're talking about tonight. So again, right in the middle of downtown, right across from Kirkland Urban, hugely walkable, two grocery stores within a couple minute walk. I think you know all those characteristics of the setting. Of the 290 units at Arete, 228 units are eco flats, meaning that they have shared kitchens, although most have their own bathrooms. And this proposed deal that we're talking about tonight would encompass affordability restrictions at 60% of the area median income or AMI on 218 of the eco flat units or 75% of the total units. And just to provide an illustration of what 60% AMI means in our community, it's about $66,000 per year for a household of one. So we're talking about, you know, pretty critical employees in our community. So we're talking about postal employees, executive assistants, preschool teachers, entry-level transit workers that need to have housing that's affordable at 60% AMI. So this is the slide you've seen this, I don't know, 50 or 60 times over the last couple of years. It shows our housing needs through 2044, 13,200 units across all income levels. And I'll just point out a couple of things. First, as you all know, the greatest need based on this chart is in the 50% and under range. And that's about 10,440 units or about 80% of our need. The need in the 51 to 80% range is much smaller, but it's still very significant. It's about 1,022 units or 8% of our overall need. And this 51% to 80% range is the bracket of income need that would be addressed by this proposed deal. So again, a really important part affordable housing strategy. So just as a reminder, here are the key elements of the proposal. Again, 218 of the eco flats at Arte, including all of the units with shared bathrooms, would be set aside at 60% AMI. Tenant turnover has been an interest of council on previous agreements. So right now, according to the owner, a majority of the units are rented by tenants whose incomes are over 60% AMI. And under the terms of the deal, these tenants could stay at RIT, but may be relocated to non-income restricted units in the building. Regarding income growth, if a tenant who makes no more than 60% AMI moves into a unit and then their income increases up to 80% AMI, the units would still be considered affordable. regarding the eligibility for the tax exemption, the property owner gets the tax break for at least 20 to 40 years. And as long as 75% of the units are rented to households making no more than 60% AMI with that limited income growth provision that I just talked about, as I previously mentioned, they would be eligible for the tax exemption. um regarding the loan to be eligible for the tax break besides meeting the affordability requirements the project has to receive financial public financial assistance under the state law and that's where the city comes in so the proposal is to give the owner a 500 000 no interest loan for up to 40 years And then the monitoring plan would have built in procedures for ensuring the affordability provisions of the agreement are met. And those would also likely be monitored by our colleagues at ARCH. And then the last thing I want to mention about the key elements of the proposal is that the project would be owned and operated by a nonprofit. That nonprofit is still to be determined. The current owner has a list of organizations they will potentially negotiate with if the deal moves forward. This slide we put together in response to questions about the sort of the implications of the tax break. So I just want to mention two things about the slide. First is that the owner, the current owner of the project estimates the value of the tax break at about $502,000 per year. And then there have been lots of questions about the impact to city homeowners of the tax break. So using our internal tool, our finance department staff estimated that the city property taxes that would be shifted to the owner of a median value home in Kirkland as a result of the tax break if it were to be approved would be about $1.25 a year. And that's again for a median value home in Kirkland. I would also note though that that figure does not include shifted taxes and other taxing districts. We're really just talking about the shifted taxes for city property tax. And then this is the last slide. These are the issues for council consideration that we flagged in the staff memo. I'll go through them relatively fast, but you're welcome to ask questions about them. Um... First is regarding income limits. So the project without, the ROT project without any covenant in place, just market rate rents already has a very high degree of affordability with 89% of the eco flats renting for less than 60% AMI. I'd also note the affordability under this deal would be keyed to region wide rents for studio units, which in many cases have complete kitchens and in unit bathrooms. And so in some ways may be superior to these units. So a key question is whether it is likely for rents to increase or decrease in these units over time, and then whether affordability levels should be linked to something less than studio units. Again, these are just questions that we're posing. Unit types, the agreement includes only eco flats and not one to three bedroom units. And we'd note that one to three bedroom units, which are present in RTA, particularly the two and three bedroom units may be the most desirable units and the ones that are most likely to undergo a future rent escalation. Although there might be a lot of value in preserving the eco flats as well at affordable levels. So the question is, should any of the more household size units be included in the mix under the agreement? Rent increases is another issue that we flagged. So you probably know that these units would not be subject to the recently passed state authorized rent control law. And so they would fluctuate according to changes in area median income. They're linked to AMI, similar to other ARCH managed units in the city. So what happens is that if median income rises at a faster rate than an individual's income, that individual's living unit becomes less affordable. um and again so we're talking about this issue in terms of you know individual experience versus aggregate experience and so the question is should there be a cap on rent increases to reflect you know potential escalation of median income in the region and then lastly um the loan in the terms of the agreement so we're talking again about a 500 000 loan at zero percent interest um and for a term of up to 40 years and i see that council member tim chisholm has his hand up as well councilman chisholm

Uh, thank you Adam. So my question is on the terms of the loan. I understand the value of this project and I'm generally supportive. The loan terms are 0% interest and my question for staff. Is, uh, You know why isn't this loan at 6% interest or the prevailing rate or whatever a normal loan would be at from Fannie Mae or Freddie Mac or the federal government? And I would note that 20 years of interest or 40 years of interest at 6%. Would be maybe 350,000 over 20 years, or if the loan is over 40 years. You know. 800,000 or more. And why are we foregoing that interest at some sort of a reasonable rate?

I see the city manager has his hand up.

Go ahead.

I can do an initial response to that. So that's one of the reasons we have the question. I think the intent of the staff in the starting point was if we're trying to facilitate affordable housing, we're trying to remove as many barriers as possible. So any cost that we'd be imposing, we would start off saying we shouldn't be doing that. But the When the project was first thought of several years ago, the intent was that the amount of money was going to be a contribution, not a loan. So even that's better, I think, than the original idea, which was this would just be part of our contribution to the stack of funding. So that's the primary reason. We were just thinking we wanted to keep the impact as low as possible, but there's certainly no reason we couldn't have a discussion with the property owner about whether there should be an interest on the loan.

okay i mean i understand the reasons to support this but um and i understand not having a high or exorbitantly high interest rate but um zero seems uh concerning and i i would i would ask that different options be brought back at the prevailing rate or or that that be investigated thank you thank you

Great, thanks. I don't have that much. Oh, sorry.

No, I was going to tell you to go ahead. So you're good.

OK. I was going to mention, I don't have that much more to add. So yeah, we already sort of got into the terms of the loan. The term is 40 years also is the only other thing that we'd flag. And again, the owner indicates that all the terms of the agreement are necessary to secure financing for the project. We would note that typical inclusionary zoning units in Kirkland's market rate buildings usually affordable for the life of the project. So when you're thinking about the term of the loan and the term of the affordability, you might think about that as well. And with that, I think that exhausts the issues for council consideration. We're happy to take more questions. And again, we're just looking for feedback on undertaking additional work on this agreement and then any follow-up questions that we can research further.

Okay. Thank you. Do you have another question?

No. No.

Oh, OK. All right, Councilman Paschall.

Thank you. A couple questions. So this, so maybe I'm getting this development confused with the other one next door. So the other one had multifamily tax exemption and this one didn't. Is that what is that what you're saying? Correct, yeah. OK. And then on You know, I guess what I heard from the presentation was that the eco flats, you know, many of them currently rent less than 60% AMI. It's just that there's no income restrictions on renting to folks that meet that today, right?

Yeah, that's right. I think 89% rent for less than 60% AMI. And again, they rent those low levels just by nature of the fact that they're very compact and were designed for affordability at market rates.

I guess what market information do we have that would say that the current rents would exceed 60% AMI in the future? Is it just kind of just more back of the envelope? calculations or estimates? Or is there more there to kind of substantiate that?

Yeah, that's something that we could look at further. I don't think we have a lot of hard data on that at this point. It's hard to predict what happens with rents in the future. Oftentimes, as buildings age, the rents get cheaper. But sometimes, especially when there's a constrained housing supply or a lot of economic growth, the opposite can happen. So to answer your question, I don't think we have perfect, hard data on that issue right now. That's something we could look into further.

I'd be interested in just a little bit more. focus on that, I'd like to be assured that at least we gave it a good due diligence. Thank you. Thank you.

Andrew?

Yeah, I was just going to say, I think we'll definitely see what we can figure out on that. I think certainly talk with the developer as well and others to get some insight. I think In proposing this to you, I was also looking at the other side of the coin, which is how likely are more people to become low income? And that's, I think, one of the challenges that we're seeing. We had our discussion of the utility rates earlier, right, that there's also is the need increasing for dedicated affordable housing. So I think those are the two factors you want to weigh. One is what is likely to happen with rents. Two is what's likely to happen with the need.

Council Member Arnold. Thank you. To Council Member Pascoe's question, I am wondering, you know, it's not just the rent of this, it's the risk of losing these affordable units. And I see that we have Robert Penley and Angela Rosman of Sustainable Kirkland here. I'm wondering if they are able to share, like, from what they have had is what's what's the interest in any alternatives that they have had for this property that um to compare to compared to this to the eco flats if they're prepared to discuss if not um that is fine too i think robert has his hand raised mayor You wanted him to respond to that. Is the mayor frozen?

Oh, I think she is.

Deputy Mayor, do you want to take over for a second? Sure.

So, Mr. Pantley?

Thank you very much Council and I would like to give some response to the comments already because we all want affordability and we want the best affordability that we can occur and what started this whole process was we went to sell the property and we got multiple offers of which and it has continued over the last couple of years. where people want to do value add to this property and their job to do value add is to is to push rents up. And personally, it scared me to death because that's not been our mission. And when we first built this, the president of the of the bank that gave us the construction financing, he said, you know, it'd be a lot better if you just build all luxuries economically, because they did a lot of this. And I said, I know that, but that's not our mission. So our goal here is to maintain the mission. And what happened is when we built Arete, the AMAs eyes were up here and all of our rents were below. And what's happened, we've broken through, we've done the start of a crossover. And the crossover means that the rents are increasing, the cost pressures are unbelievable, from insurance to real estate taxes to wages, and the rents have pushed began to push over the AMI 60%. And then, so that's what motivated this. I figured out that I'm not getting any younger and my doctor says I'm biologically 10 years younger than my chronological age and I still checked, I'm still getting older. And so we're moving to make a sale and we believe the best thing that we can do for our city is to put on a covenant. That said, we have underlying loans that we have to get approval for. So anything we agreed to has to achieve Fannie Mae's approval or we'll be in loan default. And it's very, we've done a lot of homework and we think we're headed in the right direction, but it is an ongoing challenge. I've never seen the financial markets so challenging in my career as we are right now. based on the federal level, I'm not confident it's not gonna continue. So I think we're in for a long road here. The goal though is why do we also think that rents will increase? Well, since 2020, from 2000 to 2022 in the city of Kirkland, incomes increased 117%. Rents have increased 165%. and the hardest hit are our lowest incomes. So I would hope that we would, you know, really do something special to protect our lower incomes. The other thing that the covenant does to be clear, and I think it was briefly mentioned by council member Pascal, but right now, and I think the planning director also said it, right now, slightly over half of our units are rented by people over 60%. What this transition will do is get everybody in the 50% to be able to rent instead of, some of our folks make 100, 120,000. They like the units too. They're very convenient and cost-effective. And we have a capacity problem. We ended up 97% full, at the end of July, which means the only difference really is our ability to turn units because we have so many units. From our perspective, we're over full. So it does solve a real big problem and it really will support our local businesses um which means that the restaurant owners the the the reception at the medical center the postal service per people that that adam talked about these are real people and the more we can keep our local employees living downtown they're not parking on the street now and they're um they're part of our community and we believe it's And I know the Council does too. It's really the best answer. So hopefully I answered some of those questions for you, but we are very concerned with the crossover effect, meaning that the rents are already started over versus what we had in 20 when we first got approval in 2013. Another thing is Seattle in 2013 was the 27th most expensive market in the nation large city area. We are now number six. So that's another example of where rents are just pushing through over the over the line. Thank you very much.

Thank you for that answer to my question. The Just overall, my comments and answers to the staff questions. First, I really appreciate the work of Mr. Pantley and Sustainable Kirkland. Arte's innovative and award-winning approach provided eco flats that are affordable to renters at 60% AMI without subsidy. I was on the Planning Commission when this concept first moved forward, and the original zoning made this possible with parking flexibility. Moving forward, there is the risk of these rents going up or even reconfiguring units to market rate housing. The city in sustainable Kirkland has worked over several years to try to prevent this. There were proposals that came before previous councils. Some of the public comment that we've gotten in the email we've gotten have asked about using Amazon or Microsoft's housing fund instead of public particip public funding that was part of something council looked at a year ago and even with it fell through because those fund priorities were other housing types but even when they were looking at this some public participation was was required um given our growth targets if these units converted to market rate, we would still have to make up for the loss for affordable units. And for our $500,000 investment, we're preserving 218 units at 60% AMI for 20 to 40 years. That's about $2,293 per unit. To Councilmember Tim Chisholm's point, on interest, I would support this even if it was a grant. So I'd support this as a zero interest loan because we're getting some clear public benefit. To some of the issues for council consideration, my priority is scale. So I support the focus on eco flats versus other types of units. On rent increases, we note in the presentation in the packet that because these are affordable units, The tenant protections in House Bill 1217 don't apply. But, and rent is linked to AMI. Well, we've seen rent spikes when AMI has spiked. So if this wasn't something that was a showstopper for federal project financing, I'd like to see staff explore THE PROTECTIONS THAT ARE IN HOUSE BILL 1217, PERHAPS SOMETHING ALONG THE LINES OF LIMITING RENT INCREASES TO INCREASE IN AMI OR THE HOUSE BILL 2017 REQUIREMENTS, WHATEVER IS LOWER. THAT WOULD BE MY SUGGESTION, BUT WOULD LIKE TO EXPLORE SOMETHING LIKE THAT. AND BEYOND THAT, I'M TOTALLY SUPPORTIVE OF MOVING FORWARD WITH THIS AND APPRECIATE THE DEVELOPERS AND TEAM MOVING THIS FORWARD. THANK YOU.

THANK YOU. COUNSELOR PASCHAL.

YEAH, I JUST HAD A COUPLE QUESTIONS AFTER LISTENING TO ROBERT SPEAK. THANKS FOR COMING TONIGHT WITH ROBERT AND ANGELA. I APPRECIATE IT. You know, one of the bullets up here is the unit types, number one to three bedroom units aren't included. Could you talk a little bit more about that? And how would the deal need to change to include those?

Did I do that right?

Yes, go ahead.

Okay. I want to make sure I'm supposed to speak. Okay. I would love to include the one to three bedroom units. If we did this at this point, I can tell you that the underwriters for our loan would just turn it down flat because we've already asked the question, what can we do? It would require a reduction of the loan amounts in this many units To make that work, Amazon for 97 units put up 22 million in Kirkland a year ago or so. You're probably looking at the same ratio. So, you know, approximately it would take about $14 million from Amazon to make that work. That's an approximate. Or the city, obviously the city could say, that's fine, we want to do it. There might be an opportunity when we get this in place, if there's any way we can get there in any form, people here know me. I will do everything I can to make it happen. Even if we can find three or four or seven units, we'll fall all over ourselves to make it happen.

Okay, thank you.

So who's next? Deputy Mayor.

Thank you, Mayor. Yeah, thank you for this conversation. Thank you, Sustainable Kirkland, Mr. Pantley. Thank you for the work you've done in our community to help us create the greater mix of housing types that we need. Some of which, like the Eagle Flats, uh can be naturally occurring affordable housing as we've seen so uh really appreciate your work um I do have a couple of things um I want I you know I want to sort of highlight for for staff I I support us moving forward with this I I appreciate um I appreciate the the value of this project or um this idea the idea of preserving units of naturally occurring affordable housing, having them now be applicants be sort of means tested in that they will have to meet the low income requirements. The cost of this $500,000 versus the cost of constructing new units or renovating new units. We know that constructing new units is one unit is roughly $600,000 in our current market, and we're getting the 218 preserved units for less than that. So I appreciate all that. At the same time, I know I have, I'm cognizant of my responsibility to Kirkland's taxpayers and the opportunity cost associated with spending this money on this project and not others. So I do want to provide my feedback to staff. There are a couple of really sort of three areas I really do want us to explore in the negotiations. I would like us to sort of stress test. I appreciate Mr. Pantley's response to the idea of some of the one, two, and three bedroom units, if it's possible, if they could be part of the mix. of affordable units. I'd like to explore that a little bit further. Maybe there's a little bit of mixing and matching that can be done to get just a few family-sized units included if maybe some number of the 218 eco flats are not included. I don't know, but I'd like to explore that idea further. I would also like to explore just a little bit further the length of the affordability commitment. So when we're having further conversations as we proceed with this proposal, typically affordable projects in Kirkland, it's for the life of the project, the affordability. I understand that's not part of the current proposal. I'd like to explore that just further to find out if there's anything that's workable for a longer term commitment there. And then the last topic or the last sort of element that I'd like the staff to explore, and these are just sort of the top three, but there is a real annual tax benefit to the property owner from the tax benefit It does seem to me that there might be a way to have the city and ultimately the taxpayers paid back on a quicker schedule. So I would like to explore the payment terms a little bit. I'm not as concerned about the interest rate on the loan. I'm okay with the idea of a no interest loan. But maybe there's a repayment schedule given the tax benefits that are annual, that a percentage of those tax benefits could come back to the city and repay the loan a little bit faster than just a final balloon payment of $500,000 at the end of 20 years. I'd like to explore that a little further. And in lieu of interest rates, there would be, if there was a repayment schedule, then there would be finance charges if payments were late to sort of just incentivize timely payment. So that'd be one way to sort of recapture some of the value, the time value. If payments aren't made timely, I'm not expecting that they won't be, but you always have to account for that. So unless staff has any questions about my ideas there, I will, I'll hand it back. Okay. I see a thumb raise from city manager. So thank you.

Thank you. Councillor Falcone, Councillor Primm, we haven't heard from you yet.

Well, there you go. Councillor Falcone. thank you madam mayor i was um intently listening to the conversation so that i would have things to respond to and to see if you know to be able to share my thoughts on um the great ideas from coming from my fellow council members well first um thank you um mr pantley ms rosman and all the partners involved for bringing this to us you know we heard from the community loud and clear during the comprehensive plan process that they want us to prioritize preserving affordable housing And to me, this is just a no brainer. It's a great opportunity that you're presenting to us to be able to preserve hundreds of units of affordable housing in our city and in such a prime location in downtown Kirkland, a lot of the work coming out of 1220, you know, in the comprehensive plan was really not just about the number of affordable units that we talk about, but also the quality of life and the amenities in close proximity to the affordable housing that we work on here in the city of Kirkland. And so that's a big factor here too. This is a prime location for affordable housing that folks have access to the library, to transit, to great restaurants and parks. So thank you for that. I do have some thoughts on some of the proposed policy considerations, but first I have a question on one of them too. to Mr. Pantley or Ms. Rosman about the idea of exploring an additional length of the commitment on affordable housing. Can you speak to the feasibility of that, the potential impact on the underwriting or other considerations? I just want to hear your thoughts on that before I share my thoughts.

I would love to extend, and what we will do is we will go back to our Fannie Mae representative and tell them what we want to do. But I would love to, my thought is the LIHTC standard is 55 years in the state of Washington. So it seems like they've done enough financing. So that is going to be our request. Can we extend? without a penalty of the underwriting and it gets and I think it should work. But we started with this process when we started with with our first time around and we've talked to a lot of nonprofits and even the nonprofits national firms that have billions of dollars in real estate. I'm shocked at how sensitive they are to these kinds of issues. So, and it's all about being able to finance out the term of the second buyer. It isn't about just getting it done now. It's what happens, excuse me, like a LIHTC term is 15 years. And by the time you're all done, it's 17 or 18 years. What does this next buyer look for? And, but you have my absolute commitment. We'll collaborate with the city staff and work very hard to make that happen. No one would be happier than I am to see that extended.

Great, thank you. That's really helpful. I mean, my lens on this is that I have like two goals here. One, I want to make sure we get the largest community benefit that would actually be helpful to community members most in need. And two, that we don't kill the deal by any changes that we want to see, right? That I want to make sure this goes through and that we don't over squeeze to try to get so much out of it that some potential partners walk away from the table, right? So those are kind of my two check marks that I wanna make sure in any of these proposed guidance that we give to stop to negotiate with you and the team that we check both of those. So I am supportive of council member Arnold's idea of mirroring the cap on rent increases into House Bill 1217. I think that's a great idea. And I would like to see that for obvious reasons, because as long as that doesn't kill the deal, I think that would certainly provide a better community benefit. So I do support that. I also support asking for an additional length of commitment on affordability if that's something again that's not going to kill the deal so if it sounds like you're comfortable at least with the ask if it's not going to um you know offend enough for folks to walk away or at least um decrease their um their trust in the negotiations um then i i would support that but i trust the judgment of staff um and and you um mr hantley and having that conversation around what's appropriate there For those same reasons, I don't support messing with either like adding interest on the loan or having earlier payments on the loan. Just like Councilor Arnold said, I was all in on this and thought it was a huge return on investment for a relatively, in the grand scheme of things, relatively smaller investment compared to the value of the project and the value of the return of just having it be a grant. So it even being a loan is fine with me. I don't support any interest or any earlier payment on that. And I would even be fine in going back to a grant if that was necessary to get some of the other terms that we want. I don't know if that's even something that would be attractive as a negotiating token, but that is something that I would be happy to support if it could get us some of the other things that we're looking for. For the same reason, because of your response to the two or three bedroom, I don't support going back to the table on the larger units, given that we've already done that. I want to make sure that they know that they've already been heard on that, right? Trusting that you've already asked that and that that's not feasible. Just want to make sure I responded to all of them. So I think there's some great ideas discussing. Those are the ones I do and don't support. And again, I think this is a no-brainer and this is exactly what the community is asking for, for us to preserve these types of units. So thank you again for bringing forth the opportunity. Thank you. Council Member Prim.

all right thanks uh yeah so first i i just want to recognize and really thank you all and everyone involved in bringing this proposal forward to us i i genuinely respect the goal of preserving affordability and i appreciate the effort to find really creative ways to keep these units accessible to lower income residents i've seen the units myself and was thoroughly impressed by the creativity of the design of the units and completely understand why you have such a low vacancy rate right now across the board. So I thank you for also for thinking of potentially implementing a covenant to keep these units affordable for the long run. Having said that, I still do have some questions as to whether this agreement is necessary given the characteristics of this particular property. So I wanna understand that a little bit more. I would like to get some more information on exactly what the risk is that a future owner would come in and suddenly convert these units into high priced market rate apartments. I think like if the ultimate goal is to keep the rents low so that individuals that are below the 60 percent AMI are able to afford it, I just want to understand if a new owner comes in, what is the real likelihood and what are we basing that likelihood on to say that the rents will dramatically increase? So maybe some more information on that would be really helpful. I am overall supportive of this idea, but I do think that information plus maybe potential other options in terms of the loan term. And then in terms of like the interest rate, I don't think I favor that too much, but I do think maybe the term duration and the various options there would be helpful information.

Thank you. Anyone else? All right. I also want to thank you both for bringing this. And you've been good partners with the city. A couple things I'm hearing from my council members. I do support looking at an earlier payment option if it can happen. And again, any payment that we get, we can reinvest in other projects. And I did appreciate Deputy Mayor's idea of swapping some larger units for some eco flats, because we do know that we have a need for larger units within the city. So I would like to explore those two. My comment or my question is really to the city manager and that we haven't talked about where this 500,000 is gonna come from. And so how would we fund the 500,000 and is there an opportunity cost to that? So can you address that please?

Yeah, the good news is this money has already been set aside in an affordable housing account for real estate excise tax. So this was budgeted a couple of years ago in the previous budget and carried it forward. So it's already there. It was originally set aside when the legislature gave cities the ability to use real estate excise tax for affordable housing. They originally did it with a sunset provision. And Kirkland was one of the few cities that actually tried to use it for affordable housing. So that was one of the impetus of us setting this aside. And we also want to demonstrate to the legislature that we would use it. Thanks to Kirkland's advocacy and other cities, we actually were able to get that cap removed. So it never did sunset. So now any city can use real estate tax for affordable housing going forward. So that's the good news. But bottom line is we already have it. It's fully budgeted and it's already there.

And how much is in that account?

Right now, just the $500,000.

Just the $500,000. And again, I'm looking at opportunity costs. You know, there's going to be another project in six months, a year, five years. So how quickly will that account replenish?

Yeah, that's a good budget conversation with the council. The short version of that is that up until the real estate excise tax is allowed to be used for affordable housing, all of our contributions are essentially through ARCH and the ARCH Trust Fund and then projects returning to the city when they are funded by ARCH. Real estate excise tax currently has to be spent within the city limits so one of the challenges of saying where would I spend it next if I had money is Kirkland alone doesn't get sort of a 10 to 1 back that arch does when it goes to the county and state gets all the other funding so we would have to have a project where that kind of money would make a difference for a Kirkland project and right now I there's a couple ideas out there that we can look at, but we don't have anything on the horizon. So our intent was really as opportunities arose, we'd come to you with proposals for using real estate excise tax to make them happen. So Houghton Village could be a concept that we could talk about. There's other places too that we could look at. But at the moment, there's nothing where something like this makes the difference that it would here where if we used it now, we could make a deal happen. There is something currently on the table where if we used it, we'd no idea what happened.

OK, thank you. It's like a bird in the hand, right? So OK, alright, that was all for me. So do you feel like you have what you need to take the next steps?

Yes, thanks for all the feedback.

OK, alright, thank you Robert and Angela for staying late with us. We'll see you soon.

Thank you very much. We deeply appreciate it.

All right, we are moving on to nine E, which is briefing on the total like southern industrial sub area visioning city manager and i'm guessing Adam staying.

yeah. Yes, this is a item where we're going to Friday a briefing that was already provided the planning Commission not looking for. decision by the Council today just information exchange and feedback go ahead and turn it back to Adam weinstein but ability to.

Actually, Martha Rhubart is going to take this one, our senior planner.

Welcome, Martha. Thank you. Thank you, city manager. Just one moment here. Yeah. Apologies for that, some technical difficulties. Can you see my screen okay? We can. Okay, thank you. Good evening, Mayor, Deputy Mayor and Council Members. I'll be presenting tonight on the Totem Lake Southern Industrial Sub Area Phase 1. I have 10 slides to cover and there is no formal direction requested from Council tonight on this project. So a brief background on the area for those who aren't familiar. This area is located in the southwest corner of the Totem Lake Urban Growth Center. It is made up of warehouses built between the 1960s and 1980s primarily for manufacturing and light industrial uses within proximity to what used to be the railway but is now the Cross Kirkland Corridor, which you can see in this map running north-south in green. And over time, the area transitioned to be a mix of office, construction retail, wholesale distribution, automotive uses, indoor recreation, and other service uses. And there are a couple of residential developments within the area today, including an apartment complex and two townhome developments. And Forbes Creek runs through the area, but it is mostly hidden behind parking lots and warehouse buildings today. So this project began back in 2022 with a community initiated amendment request that the city received to rezone several parcels on the western side of the sub area, which we call the PARMAC sites. to allow for high density residential mixed uses. And in 2023, through the review of the request, council decided to expand the Parmac car study area to include the full southern industrial sub area neighborhood. And then in 2024, as part of the comp plan policy process, policy TL 33.1 was adopted. To create a sub area plan for this area to consider a new mixed use walkable and sustainable neighborhood and then that brings us to where we are today and what i'm presenting on tonight. Which is phase one of developing that sub area plan. So the city received a grant to partner with a team from Denmark block sub on phase 1 and. Phase 1 has been focused on understanding existing conditions of the area, initial stakeholder engagement and visioning for the area. And then next year in 2027. Phase two will commence, which will be the full sub area planning process and include an evaluation of marketing market conditions for the existing uses and explore opportunities to expand housing allowances. So, as I mentioned, we have partnered with blocks hub for this initial visioning phase for the southern industrial sub area blocks hub is a Nordic hub for sustainable urbanization based in Copenhagen. and we've partnered with them previously. Their work focuses on facilitating cross-sector collaboration with cities around the world to address shared urban challenges. And for this project, they assembled a team of landscape architects, an architect specializing in adaptive reuse, and a community engagement specialist. And this work was made possible through a grant from the Scan Design Foundation. So a major piece of this phase and our work with Blocks Hub was community outreach. The Blocks Hub team visited Kirkland twice and hosted workshops with the community to understand their perspective and collaborate on a shared vision for how the area could improve and evolve in the future. And we visited the area several times to knock on doors and ask employees and business owners about what they feel is working well in the area, what could be improved, and then also invite them to the workshops. We also spoke with housing developers in the area and Community members who frequent the area and what we heard generally. Is general satisfaction with the current mix of commercial and residential uses a lot of. businesses seemed pretty happy with the way that things were in the area. They really value the area's affordable and flexible commercial spaces. There was some desire for more food options in the area for people to grab lunch at. And also a strong support for improving access to the CKC, kind of opening up the CKC to the area reduce traffic congestion and better connect the area with the rest of the city. We also heard a lot about how businesses and community members are often unaware of each other. A lot of the businesses are kind of tucked away and not visited often. Um, so through the outreach and workshops, um, the team collected over a hundred ideas for how the area could, um, evolve or be improved. Um, and then we took those a hundred ideas and, um, applied these five criteria to them. So connected, experimental, rooted, nature-based and collaborative and, um, um, reduce them down to nine, um, design concepts. Um, and each of these concepts, um, were fleshed out with the community and with city staff to identify starting points, key actions, how the concept could be scaled, how it could be, um, enabled through regulations and the points of attention for potential hurdles. And then lastly, who should be involved with implementation. So this diagram here shows all nine of the concepts. And attachment three in the staff memo includes a lot more detail. The BlockSub team wrote up a great report detailing each of the nine concepts and kind of all of the key points for them. But I am going to touch on two of them so you get an idea of what they are. The first is wayfinding and murals concept. So the concept is to create an identifying logo or icon or color and create wayfinding signage for the sub area, which would help create an identity for the area and connect the CKC users and surrounding neighborhoods within this area. And then murals would also activate the large blank facades. So there's these, you know, large warehouses that kind of line the CKC and adding some art there would kind of open up and add visual interest to those large walls and invite people into the area. The key actions for this concept were to send out an open call for art and branding proposals, apply the art to existing infrastructure such as pavement, utility boxes, or these walls, and develop a wall mural concept, maybe focused on the intersection of nature and industry that is present in this area. The regulatory enablers could be allowing signs, so a sign permit process to allow sandwich board signs or directional signs on the CKC or elsewhere in the area. The second concept is the warehouse concept. This was created because most of these buildings within this area are column beam structures, which are structurally flexible and able to accommodate many different uses. And so this creates an opportunity to build upon the existing structures either by converting them to different uses or adding on to them, which would preserve the buildings and businesses in the area while accommodating new uses such as housing. Key actions for this is to develop a transformation and development guide to show what's possible for these buildings and gives a clear pathway for development and maybe start with a pilot as a live demonstration for the community. Regulatory enablers maybe offer a height bonus for these projects. And pre approved permit pathways to expedite them and then potential hurdles points of attention. Is mitigation could be needed for mixing of residential and industrial uses and transformation could potentially increase property value and displace businesses. So looking at the comprehensive plan policy for this area, our phase one work has begun looking at many of the objectives of the policy and the components that will be included in the sub area plan analysis. So I've copied the policy here in italics and then the pieces of the policy that phase one has begun to make progress on. I won't walk through each of them, but happy to answer any questions about them. So the key takeaways from this work are that there's a lot of life in this area today. There's many small and large businesses in this area. When we were walking around and talking with them, it was clear that they really enjoy having their business located in this area and rely on the large, flexible and affordable spaces that exist. Some examples of the businesses that exist here are a custom closet store, A cookie company a catering company a brewery tennis Center a lighting store a tortilla company auto repair shops car dealership a door company drywall company hardware store and many others. And yeah it was fun to talk with everyone. Um, existing relationships between businesses and residents and the surrounding area are pretty limited. We heard a lot of, um, businesses saying that they didn't know that each other existed. Um, there are two like prominent buckets of businesses in the area. There's indoor recreation businesses and construction businesses. And based on what we heard, it sounds like, um, within those buckets, they have a symbiotic relationship, um, with each other. But the businesses outside of those buckets are pretty siloed and hidden away. We learned that the area would benefit from a stronger identity and name that reflects its character. So some characteristics that could be incorporated are the industry and nature intersection theme, production, construction, and experimentation, and the play and recreation theme. It also became very clear that the CKC is the area's living spine. It provides green space, gathering space, and creates an opportunity to connect businesses, customers, the nearby open spaces, and also the regional destinations. And lastly, there are many low hanging fruit opportunities that exist that could be implemented in this area and improve it. while simultaneously advancing the city's policy goals, such as the way finding and murals concept along with others. And that brings us to my last slide, which are the next steps for this project. We will share the final design report with the stakeholders of the area once it's finalized. And then phase two of this project will begin in 2027, which will include An analysis of commercial and light industrial lands and then further exploration of expanding housing allowances. The design concepts envisioning work and outreach that we've done in phase one can be incorporated into the sub area plan under phase two. And I also wanted to say before passing it back to the mayor just a huge thank you to the blocks have team and the experts that they involved in this project. They've brought really creative ideas for community outreach and solutions to these kind of bigger complex questions and lots of inspiration for sustainability and urban design and community building methods. So it's been fun to work with them and a huge thank you to that team for their collaboration. I'll pass it back to you, Madam Mayor.

Thank you, Martha. And I also echo your thanks to Blocks Hub. I really enjoyed participating in the first stakeholder group. It was really great. And I'm very hungry. And you started talking about cookies and tortillas. So stop. All right. Council Member Paschall.

Yeah, thank you. Thank you for all the effort on this, Martha. Yeah, I mean, it's fun to see Great to see that kind of the policy, the comp plan policy come to life, so to speak, right? Kind of moving that policy forward to implementation. And like the mayor got and the deputy mayor got to participate in the workshop with Block Sub and the other community members that participated. And it was, I participated in a number of workshops and, you know, things like that over the years. And it was something different and unique. And Well, well done. So impressed by the team as well. I just want to just offer my support for the continued kind of phase two efforts. I think this is going in the right direction and and yeah, just support that. I wanted to just ask a question, though, of staff. We did receive an email from the Planning Commission chair recommending to forego some of this work. And development of the sub area plan this week. I was wondering if from staff perspective is any of the work that we've done to date back that. Recommendation up at all.

If I can. Did we learn something that would allow us to pass it? Is that your question?

Well, I'm just wondering if, did we learn something through that where staff's now recommending us to do what the Planning Commission chair is suggesting, which is just not do the sub-area plan?

Adam, go ahead.

Yeah, thanks. Yeah. We're still in the early stages, I think. I mean, I think one of the challenges of this area as Martha pointed out is that there's this amazing fabric of small businesses here, right? And there's not a lot of industrial land in the city. So I think one of the things that we still haven't completely understood is, the role of these industrial zones in the city and the fact there aren't many of them and they're relatively fragile, right? And so I think there's, what we learned is that there are opportunities for housing here, but exactly where that goes and how much of it I think is still something that is to be determined. I think, you know, when we get through the budget process and start talking more about phase two, there might be an option to look at alternatives to a sub area plan. But I think that there's still probably a little more exploration that we want to do to figure out, you know, how housing fits into this area. Because again, I think our takeaway is that it is a really unique place and the businesses there, as Martha said, really do value the flexibility and low cost of the spaces.

Yeah, I guess it was always my impression that the sub-area plan would consider how and if the area transitions over time, right, that it's, you know, that it might not stay intact even with some of these changes that over time it could change over to housing and more density and things like that and what infrastructure would be necessary to support that, you know, is what I'm hoping that that planning effort would, you know, evaluate. So I was just, I guess I was just a little surprised to read in that email that it made it sound like we'd already made a decision that we just target residential to small portions of the sub area. And I don't know that, I just, I don't feel like the council's made that decision yet. Or the sub area plan has really made that determination. Or not sub area plan, but that phase one efforts have made that determination. So I'm just wondering if you agree with that or not.

Again, I think we'd look for Council direction on that issue. But again, I think there's probably a little more work that can be done that we can bring back to Council where you can help us, you know, you can guide us in that next step. And we can bring back options the next time we talk about the next phase of the project as well.

Okay. but you don't feel like you've received direction from us on that yet, right? Correct. Okay, thank you.

Thank you. Councilor Primm.

Yeah, I just had a question on kind of the timeline for these studies. So for this phase two study, like what is the approximate amount of time it will take from start to finish? And then let's just start there.

I can jump in again unless Martha or Ali want to, but we haven't programmed for a year on the planning work program. Again, that's a gross estimate, I would say. As you know from our experience with the stationary plan, we took a lot longer than a year to do a big stationary plan with all of its attendant technical studies. So I think the sort of the scale of change in the sub area and most particularly how much housing we end up accommodating in the station in the um the sub area and how much infrastructure is needed to support that i think will be a determinant of how long the process takes but again right now we've scheduled a year for it

And is there a way to like speed that up by any chance? Or like, you know, I guess what are the main factors and determine, so you said the main, one of the main factors is how many, how many potential areas you would have to evaluate for housing that could increase the overall timing. Is there, is there anything else that could increase the time or decrease the time to be able to finish this phase two?

Yeah, there's thanks Council member from this probably a lot of variables. Right. I think a big one right that that, you know, elongated the timeline for the stationary plan was all the technical studies that we did to support that work, which were really useful. Studies right we did infrastructure studies traffic studies. We did a really big comprehensive environmental impact statement for that project. We developed other things to go along with the plan. So I think what we would typically do is come to you relatively early on in the process, come to council and present you with a couple of alternatives for growth scenarios in the zone. And then you could give us guidance on that. And then we could know identify a scope of technical work that would go along with that um so maybe that's a non-answer to your question but i think we would present you with options some of which could lead to a shorter process some of which would result in a longer process all right thank you thank you anyone else

Deputy Mayor.

Thanks, Mayor. I just wanted to make sure I gave my guidance to council or to staff that I do like the direction we're going. I want to proceed with phase two. I do recall why I supported this from the very get go in the connection with the approval of the comp plan. I did want us to try to take a thoughtful approach to this area, look at it district wide through district wide planning and see if there was a way to protect the existing light industrial, foster some really creative commercial uses while encouraging sort of innovative housing in this area. So that's the direction I feel like we're going. I think it's worth the investment of thoughtfulness in this approach. And I'm cognizant of the fact that right now with the macroeconomic environment, what we're hearing from developers and their interest in new projects, or at least the kind of new projects we'd want to see here. I don't know that if we just expedited approval of housing that we would get anything like, that we'd get any projects or that we'd get anything like the kind of projects that we want to see in this area. So that's why I want us to take this thoughtful approach. I appreciate the thoughtfulness that's gone into this and I'm willing to invest in my vote is to it's not a vote I know but my direction is that we continue down this sort of deliberate thoughtful approach to this whole district. I really want to see this could be a great legacy for this council. So thank you.

ELLIE WILSON- Thank you. Councillor Arnold.

Thank you, Mayor, and thank you, Martha, and planning team on this. I came into this where reading the Blocks Hub report was the first I'd seen of this, and I was impressed at the scale of their vision and how to talk about large transformation in this area. There were some intriguing ideas there. That said, I'm not ready for wholesale complete change across the entire southern industrial sub area. My feedback would be to look for options for a narrowed scope for phase two. It's going to be important to preserve the light industrial, especially between 112th and 116th. And then, as was mentioned in the presentation, as we look to say, how do we maintain those affordable, flexible commercial spaces? Can they coexist? Or are we looking at some different geographical areas that may be appropriate for converting to housing? As we look at the feedback from Aaron Jacobson and Gina Medea, which I will note that email was them offering feedback as individuals, not as the Planning Commission Chair and Vice Chair. I do like the idea of evaluating and recommending areas within this industrial subarea that may be appropriate to move first on, and that might be an option for scoping future phases. Depending on the narrowed area or scope, it may make the subarea plan easier, and it may make the need for a market study, which is also a requirement, no longer needed. So we want to look at those particular options. And then finally, I understand one of the stakeholder groups actually had an inventory of businesses in the area. I think that'd be some important information to share. I know of several of the examples that were mentioned. I am aware of there are others that I may not have just from my own walking the corridor and being in the neighborhood and would like to look at this in a detailed and comprehensive manner. Thank you.

Thank you. Anyone else? Okay, first, oh, Deputy Mayor. Deputy Mayor, are you raising your hand?

I did, yeah. And I apologize for interrupting you. You certainly feel welcome to make your remarks. I was just going to highlight that as I listen to us, I think this is one of those examples where we may not be giving staff as clear direction as we need to. And so I do think one question I have for staff is, is whether they've gotten what they really need from us. I feel like there's a, we're a little bit all over the, not all over the map, but we're a little bit, we've covered some territory on the map in our feedback.

City Manager, I see your hand.

Well, to say real quick, I think, yes, in the sense that We're going to come back with options about how the 27 studies go and options that then the Council can evaluate that as to which direction you want to go with the feedback that you receive. But there's no change in what the compa language says yet, and there's no change in the idea that we need to come back in 27 to look at the sub area. But I think some ideas on things in the scope that we could bring you as options that the full council could discuss and debate and decide upon in 27 through the planning work program. That's how I interpret it.

Great. As long as staff is getting what they need, that's great. Thank you.

Council Member Falcone. Thank you, Madam Mayor. I wasn't going to speak, but Deputy Mayor raises a good point. So I just wanted to share one of my thoughts that may be helpful for staff and the direction is that I support Council Member Arnold's thoughts on seeing if there's ways to break this into smaller parts to be more efficient in doing the work. So a plus one to that, please.

Thank you. Anyone else? Going once. Going twice. All right, Martha, good job. I really appreciated the thoughtfulness that went behind this. I really appreciated the work that everyone put into reaching out to the existing businesses and getting their input. I think that's super important and it's not something we usually do. And what's really clear about this is this is a very unique area. This is unlike anything else that we have within the city both in where it resides within the totem lake regional center and the kinds of businesses it's in so i am not interested in cutting this up in little pieces i think it's really important that we do this strategically and thoughtfully and look at it holistically I think that the policy that was in the comprehensive plan was well done and so I support staying with the policy and doing the work to design this area that will become very special so thank you for that anyone else all right thank you Martha thank you Adam thank you Allison you may now go home and go to bed Hopefully you'll have very far to go. OK, Council, it is 1107 and we have Council policies and procedures and we also have three LRMs. So my suggestion is that we delay 9F Council policy procedures to a later meeting and go ahead and go into reports and the LRMs. Any objections to that? Thumbs up. Thank you, Council Member Arnold. Council Member Tim Chisholm. Oh, thumbs up from Councilor Prim.

I don't object, but I have some policies and procedure amendments that I'll be bringing at the next meeting, so I do want to address the issue at some point. Thank you.

Alright, so do I have a thumbs up from everybody? OK, we will postpone 9F and we'll decide figure out when it can be on the Council calendar again. So we're going to move into Council.

reports and i will start with deputy mayor and let's keep them short folks okay um just quick note that the mayor and i got to visit the south county recycling and transfer station in algona last friday i want to thank the staff of the city and of the county for that tour it's the latest most advanced version of a recycling and transfer station that the county's built. So that was really informative. I wanted to highlight that next Wednesday I'm going to be attending a convening by Challenge Seattle and Greater Seattle Partners to discuss economic development priorities with our mayors. The mayor was invited. She's unable to attend. So I just want my colleagues to know I'm going to be attending that in the mayor's stead. Really enjoyed National Night Out last night. Thank you to all of the first responders and the community who both organized the block parties. And again, of course, the first responders that took us out and particularly KPD who drove us around. And then I do have, there is a joint LRM on shared e-mobility that council member Paschall, council member Arnold and I are gonna present. I'm going to leave that to council member Paschall or Arnold to present during their council reports. That's it.

LRMs happen during city manager reports, not council reports.

Sorry, I'll leave it to them to bring it up during city manager reports.

Thank you. Council Member Paschall.

I don't have anything to report that can't be reported via email. Thank you.

Thank you. Council Member Falcone. Thank you. Yes, since it's late, I'm only going to mention one thing, and that is thank you to everyone who's come out to watch the amazing young athletes at this week's Junior League Softball World Series in Everest Park. It's been so fun. I know I've been out there every day. I know I saw Deputy City Manager Lopez out there. I know that Council Member Arnold's been out there. So if you haven't been out there, definitely check it out. It's so much fun. There's a lot of great energy. And the games run through Saturday morning. Thank you. Thank you. Council Member Prim.

Yeah, nothing to report. I'll be sending an email.

Thank you. Thank you. Council Member Arnold.

No report.

Council Member Jim Chisholm.

No report.

thank you my report i will send but i do want to take a moment to thank city staff and everyone that worked behind the scenes to make sure that this meeting went smoothly um really really appreciate it so thank you everyone city manager i'm handing it over to you okay thank you have one short update and then i'll call for the calendar and lrm question the short update um

I think you may all know we are now part of a municipal city jail caucus that came out of our legislative actions. In that caucus, we found ourselves in the realm of being the conveners. Andrea Campbell, our government affairs manager, has been leading that. We had a meeting with Roger Goodman to discuss the idea as a group of if cities met certain standards for their jail operations, could they get sort of a safe harbor from lawsuits, especially if there's injuries or death in the jail. And so many jails are facing basically extinction. If you have one bad event, you could lose billions of dollars in settlement. JUST WANT TO LET YOU KNOW THAT SINCE THE LEGISLATIVE WORK GROUP HASN'T BEEN ABLE TO BE PART OF THIS YET, WE MET WITH ROGER GUDMAN AND HIS SUGGESTION WAS TO MEET WITH SENATOR MAKADINGRA, WHO'S THE CHAIR OF THE SENATE COMMITTEE. WE DID THAT YESTERDAY, AND SEVERAL OF THE MAYORS FROM THE CITIES WERE THERE AS WELL AS US. IT WAS A REALLY GREAT MEETING. SHE TOLD US THAT SHE WOULD BE WILLING TO POTENTIALLY SPONSOR THE BILL IF IT MET HER PRAMERS, WHICH SHE LAID OUT. BUT ON ALL OF YOUR BEHALF, SOME BEHALF OF OUR CORRECTIONS DEPARTMENT AND OTHERS, WE'RE making some progress on this issue. And I just want y'all to know about it because it's kind of happening outside of our normal legislative workgroup process. But we had a really good meeting with the senator. Much more to come. All right. So next will be the calendar. And I know we have a couple of legislative request memos. So the city attorney's office has been kind enough to put them on the slides for us all. So we did them kind of in the order we received them. So I guess I'll just look to the council to see who wants to make the motion in the order that they're showing.

Council Member Paschall.

Thank you Madam Mayor. So just a little bit of just quick background for those that might be watching. I think several of us were approached some time ago by representatives of Lyme. and indicating that they're in our adjoining cities and agencies surrounding Kirkland, Bothell, Woodinville, Redmond, and now are just starting a program in Bellevue. And saying that now Kirkland is kind of in a donut hole, right? And so they'd like to start conversations with us about introducing micromobility options here to our city. And then they followed that up with a letter to the council believe yesterday or the day before with their interest. And so based upon that letter, that official letter from Lyme, I feel like it's prudent, talking with W. Mayor Black and Councilmember Arnold, I feel like it's prudent to offer LRM so that we can look at this option. This isn't approval of it. It's just look and explore options of how we might consider micro mobility program in Kirkland. And we know that e-bike safety has been a big conversation in the community, not just in Kirkland, but across the region and state. And that has to be, you know, continue to be part of any option and evaluation that we look at. So with that, I'll make a motion and we can have any discussion. Motion for the council to approve a legislative request memo asking the city manager to explore options for allowing a shared micromobility program, including e-scooters, e-gliders, and e-bikes, such as the one operated by Lime within the city with corresponding attention to rider and community safety. Second. Second.

I don't know who that was. I'm going to give it to Black, just because he was loudest. Motion's been made by Councilmember Paschall, second by Deputy Mayor Black. Any discussion? All those in favor, please say aye. Aye. Any opposed? Motion carries 7-0. Thank you, gentlemen. All right, next.

Okay, I want to give some background on this. So I'm proposing this LRM to explore helmet requirements for high speed micro mobility devices, such as e-bikes, because our responsibility is really to protect public safety, especially for our children and teens. E-bikes are, as everyone knows, e-bikes are becoming very common in our community. And the data is speaking quite loudly. A mid-2026 national analysis by Trovita, which is a Very legitimate data set governed by the major U.S. health systems across the country found that emergency room visits for e-bike and e-scooter injuries among children and adolescents increased by 671% between January of 2023 and May of 2026. And many times, it really is the lack of helmets that causes these injuries. As an example, from June 2025 to June 2026, a major hospital in Texas treated 127 pediatric patients, out of which 99 of them, and this was for them being on injuries caused by bicycles or e-bikes or e-scooters, 78% of them were not wearing helmets. So I understand, you know, helmets definitely cannot prevent every injury, but I do think that that's the simplest and most effective way for us to reduce the risk of potential head injuries. Therefore, I don't think that this is not like a request to get approval for this, but really to explore options on whether or not this is something we could do in the city of Kirkland. SO I MOVE THAT WE APPROVE A LEGISLATIVE REQUEST MEMO ASKING STAFF TO PROVIDE OPTIONS FOR REQUIRING THE USE OF BIKE HELMETS WHEN OPERATING A MICROMOBILITY DEVICE LIKE BICYCLES, E-BIKES, E-SCOOTERS, ET CETERA IN KIRKLAND.

SECOND.

I HEARD COUNCILMEMBER TIM CHIZEN ON THE SECOND. SO IT'S BEEN MOVED BY COUNCILMEMBER PRIM, SECOND BY COUNCILMEMBER TIM CHIZEN TO MOVE FORWARD. The Helmet LRM, is there any discussion? Deputy Mayor.

Just one quick comment. I really appreciate Councilmember Prem bringing this forward and it is a topic that was discussed by me and Councilmember Arnold and Councilmember Paschall in connection with the E, the shared E micromobility as well. Just know that we were thinking about this topic, too, and one of the reasons we worded that LRM the way we did is we were hoping that that might, that LRM might come back with some suggestions for how we might look at helmets, too. But this is the more, this is the clearer, more direct way to do it, and I think it makes a ton of sense, and I'm going to support it.

Thank you. Council Member Tim Chisholm.

I'll support that sport this lrm I think one of the interesting legal questions that will emerge is if a civil infraction a non criminal civil infraction is issued whether that civil infraction is issued to the writer or the parents. Thank you.

Thank you. Councilor Arnold.

Just a quick comment generally on LRMs, we've been pretty open to these because it's just starting the conversation. But for helmets, and while there should be no argument about wearing a helmet when you're riding a bicycle, e-bike, e-scooter, et cetera, the question on requiring this and enforcing it and all this gets very complicated very fast, and I am conscious of staff capacity even in looking at this for an LRM. And so while I think it's an important issue, I'm not sure it's one that I'm supportive of moving on immediately. And so in the interest of prioritization, I'm going to be voting against this. But please, everybody out there, parents out there, make sure that you're riding helmets. I'm just not sure about city action at this point. Thank you.

Thank you. Anyone else? All right. Questions on the motion to move forward the helmet LRM made by Councilmember Prim, seconded by Councilmember Tim Chisholm. All those in favor, please say aye. Aye. All those opposed?

No.

Motion carries 6-1. All right. Holmes Point overlay. Councilmember Falcone.

Thank you, Madam Mayor. Since Councillor Paschal presented the other LRM, I hope he doesn't mind if I present this one just to share the workload. This is a joint proposed LRM by Councillor Paschal and I. I won't go into much detail about it because I think we're all fairly familiar with these issues. There's two issues in here. You've probably all read the language, but just for those watching at home, These both relate to the Holmes Point Overlay, which is a part of the neighborhood in the Finn Hill neighborhood, right? It's a portion of the Finn Hill neighborhood for those who may not be familiar. And the two, there are stricter rules within the Holmes Point Overlay about property usage and development. And so these are to address some of the issues that we've been hearing repeatedly from community members that live in the Holmes Point neighborhood of Finn Hill. The first is, I've brought this up several times over the past few years since we've adopted our new tree code, and that is allowing some more flexibility for tree removal for homeowners in the Holmes Point neighborhood. There are folks who I've heard from who are incurring a lot of extra work and and expense because of trees that are, you know, damaging their home or having, you know, other issues, but the trees are healthy and so they're currently not allowed to remove them in the Holmes Point overlay. They do not have the ability to remove either two or four trees like property owners do in the rest of the city. So I'd like for us to look at options for more flexibility there, or we'd like to look at that. And the second is related to lot coverage and lot splitting. I think we're all at least somewhat familiar with the Holmes Point overlay being more restrictive in this, and essentially the larger the lot that you have, the higher or the less lot coverage are allowed, right, on larger properties. So for properties that already have an existing home that may be a large home, even if they have a very large property, are not allowed to split that lot in order to facilitate our more desperately needed housing development in our community. And this targets specifically flexibility in those cases in the Holmes Point overlay area for missing middle housing, because we know that that's what we need more than the big McMansions that we see everywhere. So it's very targeted specifically at looking at ways that we could be more flexible with allowing missing middle housing and lot splitting in order to allow that to happen in the Holmes Point overlay. So I will make the motion. We moved to approve an LRM to explore options for two potential code amendments related to the Holmes Point Overlay. The first would involve expanding the ability to remove trees in the Holmes Point Overlay outside of development scenarios. For instance, increasing the ability to remove trees to better align with allowances in the rest of the city where a property owner can generally remove two to four trees per year, depending on the size of the property. The second code amendment would involve loosening one or more development standards in the homes point overlay to facilitate the development of middle housing. The options that are explored should consider whether these amendments can be integrated into projects that are currently on the 2026 to 2028 planning work program.

Thank you. It's been moved by Council Member Falcone, seconded by Council Member Paschall to move forward the Holmes Point Overlay LRM. Council Member Paschall.

Thank you. Council Member Falcone did a great job of explaining that. The only couple of things I just want to add or emphasize is that these things are issues that we've heard from the community members. These aren't just wild ideas that both of us came up with, but these are things, conversations I've been having over the years. I'm sure you've heard too from other community members about this. And then second, we were very specific with staff that we wanted these to be very targeted and really want to, and that's why that last sentence is there, is to try to find a way to see if we're targeted, can they be added to an existing work program item rather than creating a whole another set of of work for the planning department because we know that they're stretched thin that there's a lot of different priorities and we wanted to basically just kind of append on to an existing process and so that's our hope that staff will look at that and see what would be the appropriate way of considering these amendments thank you thank you anyone else

I do appreciate that you recognize the potential impact to the planning work program. I thought that was a nice add to the LRM, so thank you for that. Any further discussion? All those in favor, please say aye.

Aye.

Any opposed? Motion carries 7-0. All right, well done everyone. City Manager, anything else from you? You're muted.

I failed very and I just was. I will reschedule the Council policies and procedure discussion. Are there any other calendar changes from the Council before we finish? Alright, so now I just want to add my thanks to the IT staff and the clerk's office team and everyone who made this virtual meeting go so well and a huge thanks to the Council members for your flexibility and your patience as we did it. And you guys did a great job.

So thank you. Thank you everyone. Enjoy your recess and we are adjourned.