City Council - Regular Meeting

All right, welcome. As it is 5.30, I will call this city council meeting of August 18th, 2026 to order. We recognize that this meeting is being held on the ancestral lands of the Coast Salish people. We pay our respect to those past and present. Tonight's invocation will be led by Pastor Sam Giles from Living Faith Church. If everyone could please stand for the invocation and remain standing for the Pledge of Allegiance.

Let us pray. Loving Creator, we pause to center ourselves in the gratitude for the diversity and the gifts and talents represented in this room. As we gather together, we ask for wisdom and insight on these deliberations that our efforts might strengthen our businesses and uplift our community. May we be driven in the spirit of innovation and commitment to service, ensuring our work fosters prosperity for all, guide us in our decisions towards justice, equity, and lasting success. Amen.

Right? All right. Tonight's meeting will both be a physical and a virtual meeting. It may be viewed on YouTube and following the meeting on Facebook. Is Mary Pro Tem online? Okay, so she was supposed to be joining us remotely. Otherwise, everyone else is present and accounted for. So... Are there any suggested changes to the regular agenda? I think she's gonna join. I think she's just, she's dialing in from a vote, so. Yeah. Any suggested changes to the regular agenda as presented? If not, I would request a motion to approve it as presented. So moved. Second. All right, we have a motion to approve the agenda as presented and seconded by Councilmember Peterson. Is there any further discussion before I call for a vote? Hearing, seeing none, all in favor, raise your hands. Passage unanimously. I'm helping Sabrina because she is our acting city clerk tonight. So we're wearing all hats upstairs today, the two of us. Right, yeah. All right, so public comments on consent agenda items or subjects of interest not listed on the agenda at this time. Opportunity to comment on the remaining agenda items during the meeting as appropriate. Please note comments regarding public hearing items will be heard during that portion of the agenda. We have one public hearing item for today's meeting. Visit our website for methods to submit public comments. Public comments sent anonymously or from a non-verifiable address will be shared with the mayor and council, but will not be displayed. At this time, we will accept public comments on items not listed on the agenda or on the consent agenda. No further comments, okay. Oh, you have, yes. Okay, so yeah, please step forward, state your name and address, yeah, and then make your public comment, limited to three minutes. No worries.

Thank you. I've never done anything like this before. Sorry, no worries. Thank you. My name's Ryan Katwalder. I live on, do I have to give my address also? 1144 Northeast Taftson Street. The reason I'm here today is the dock at the lagoon, the city beach right there by the splash pad. Through my summer job, I was able to go there with I worked at a summer camp basically. I'm not here on their behalf. I'm here completely individually as just as a citizen. Um, the kids really love jumping off the dock into the water and I've seen a lot of other families doing that. As I'm sure you guys know, the dock is in pretty rough shape. There's a lot of rusty nails sticking up out of it. The wood itself is kind of rotted out and, uh, it's just kind of a safety issue. And, um, I was just hoping to kind of vocalize this and maybe open up some sort of dialogue as to, I'm sure there's all kinds of permitting things and funding and, um, I don't know what all stands in the way of that being fixed, but I just wanted to kind of be a voice to say that there's definitely a want for that to be fixed. Um, so there's not rusty nails sticking out and whatever I can do to help that get, you know, facilitate that I can work on community outreach. Um, I'm sure there's enough people who would want to help fund money to get something like that going. I'm sorry, I'm a little nervous. Like I said, I've never done this before. You're doing great. But, yeah, that's all I'm here for. I just kind of wanted to throw that out there and hopefully open up some sort of conversation. Whatever I can do to help out, I would love to help out with that. And there's a huge, huge want for it in the community, too, from everyone I've talked to about it.

Appreciate you bringing that forward. I was not aware of that. So I will definitely will have a follow-up conversation this afternoon So great. Thank you.

Thank you It will be yes councilmember arms to just uh, yeah Regarding that I thought we were looking into that before maybe last year

So yeah, I think that was an item that was on the Parks and Recreation team list, but we've had some changes, so I'm sitting down with the Parks and Recreation Director, Craig, this week, and so I will add that to our discussion as Mayor talked about.

Yeah, because there was something about how it fitted in there with the water and the type of material. So there was something there, so we'll re-look at that. Thank you.

Can I ask another question? Sure, absolutely. What's my best path to kind of follow up on this question? Go ahead.

We're going to put, I'm going to put you in contact with that lady right there. She'll follow up with you. Yeah.

Great. Thank you.

If you put your information down on the sheet, I will take it and I will follow up with you. Okay. I'm Sabrina, the city administrator.

All right. And is there anybody else here with us this evening that would like to step forward and make public comment? All right. How about those comments that were submitted electronically? There they are. That's it. All right. Well, that concludes all public comments. We'll close public comment, and we move forward to consent agenda. Are there any objections or other changes to the consent agenda as presented? If none, I would entertain a motion to approve it. Yes, Council Member Romero.

When we move, we approve the consent agenda as presented.

I'll second it.

Okay. We have a motion and seconded by Council Member Arms. Is there any further discussion before I call for a vote? Hearing, seeing none. All in favor, raise your right hand. Passes unanimously, thank you very much. All right, we're gonna move on to Mayor's comments. First, I'd like to start my comments tonight by highlighting a few events around our community over the last several days. Here are a few pictures from the Navy League and Rotary meeting and tour at the Regional Public Safety Training Facility. The 50 plus member picnic at Windjammer Park and the Sound Edge marketing event at Greenbank Farm. One of the things I really value about being there is getting out from behind the desk and spending time with people in the community. You hear different things when you're sitting down with residents, business owners, volunteers, service organizations, and community groups. I get a better sense of what people are excited about and what they'd like to see us do better. So I'm grateful for the invitations and the opportunity to be out in the community. Next, I also think it's important to recognize our staff when they do great things outside their offices. Our city archaeologist, Gideon Kaufman, took the time to attend the 2026 canoe journey at Quinault Indian Nation and also in the North Sound with the Samish Indian Nation. It's a powerful and meaningful tradition that brings people and tribal nations together through culture, connection, and community. I really appreciate Gideon taking the opportunity to be there, learn, and share his experience with us through these photos. We're excited to stay connected with our residents through our city newsletter, which has a fresh new look. You'll see the newsletter in your mailbox at the beginning of each month. It will include personal updates from me and information about things the city is working on and other important items from the city and from throughout Island County. We know not everyone is on social media or checking the city website regularly, so we wanted to have something that comes directly to you in your utility bill. It's just another way for us to keep you informed and hopefully make it a better... A little easier to know what's happening in your community.

Or use it as a dart board.

I'm honored to share an important event coming up on September 11th as we mark the 25th anniversary of 9-11. Our local first responders will be carrying a special 9-11 remembrance flag across Whidbey Island in honor of the people who lost their lives. The run will begin at Windjammer Park. following the community remembrance ceremony and continue across the island before concluding at South Whidbey Fire. I want to thank our police and fire chiefs and all of the first responders who have put their name, who have put their time and effort into making this event happen. 25 years later, it is important that we continue to remember and I think it's a great example of our first responders coming together as one community to honor that history. I hope people will come out for the remembrance ceremony and support those making the run across the island. More information about the event and to purchase a commemorative t-shirt is available on the homepage of the city website. With school starting back up soon, I would like to invite our high school students to apply to be on an advisory board or commission. We have students with great ideas and perspectives, so serving on a board or commission is an opportunity to learn how local government works, meet our community members, and have a voice in decisions. And yes, it is also something that looks good on a college application or resume. So if you're a student or you know a student who might be interested, I encourage you to check it out and consider applying. Applications are on our website under advisory boards and commissions. City offices will be closed next Thursday, August 27th from 10.45 a.m. to 1.15 p.m. for a Beat the Heat all-staff meeting event. Our staff has been working hard to put this event together and continuing to provide information on how to stay safe in high temperatures. I want to thank our admins as well as our Human Resources Department and Wellness Committee. I hope council can attend this event as well. And finally, I'm really excited about this upcoming event because it's something we've never done before. On October 29th at 6 p.m., we're going to host our first community-wide State of the City Address. This is an opportunity for me to talk directly with our community because it's important for me to find different ways to bring people together. So I hope you'll join us on October 29th. I'm really looking forward to sharing the State of the City with you. We are also inviting all of our city departments to be there and you'll have a chance to see the work happening across the city and meet the people who make it happen every day. Again, the entire community is invited and the event is free. It is a ticketed event though, so we're asking people to sign up ahead of time. You can register at www.oakharbor.gov slash state of the city or simply scan the QR code on the screen, follow our social media too for more information or visit the city's homepage. With that, I will call upon council for their comments at this time. Yes, council member Stuckey.

First off, love the newsletter. It's definitely important to get out there in all different kinds of medias and mediums, so I think that's great. And I just want to make sure with that public comment that we did follow up with the email one. Okay. Thanks.

I'll look into that, but yeah, I believe it has been followed up, so, because we usually forward it. I'm sorry. Okay. Thank

got that okay anybody else reports on commissions anything yes councilmember peterson the arts commission met the other night and we had a presentation from someone who works with the juvenile division of the court and the kids have made a bench out of skateboard decks that they are very proud of. And we are looking for ways to be able to put in the skateboard park, which I think is a fabulous idea. And I'm looking really forward to it. I hope we can get that done this year. They really want to take ownership of it. And any time we can get the youth involved, let's do it.

That's great. Thank you. Anybody else for the good of the order? All right. We will close council comments and move on to our public hearings and meetings. First up is revenue sources and property taxes for the upcoming 2027-2028 biennial budget. And here to introduce this topic is our Deputy City Administrator and Finance Director, David Goldman.

All right. Good evening, Mayor, City Council. David Goldman, Deputy City Administrator and Finance Director. All right. Looks like it's up and running. So tonight, we're going to go over the 2025 preliminary unaudited results of our financials. And then after that, we're going to go into a little bit of a comparison of where we stand based on other cities. And then after that, we'll go over our revenues, the different revenues we have for the general fund and some outside the general fund as well. This is required for us that we do it every year around this time and this is required per RCW 8455-120. Keep in mind when we get to the revenue portion, that some of those projections that you see tonight will be adjusted over the next few months until the time we get you the budget based on revenue trend data that will receive economic data, updated information that we might receive from outside agencies like the state or other agencies, and also staff input. So with that, let's go ahead and start going through the preliminary results of 2025. So those are split into two sections, the governmental funds, which includes the general fund, and the enterprise funds, which includes all the utility funds and the marina funds. So let's go over the general funds first and the terminology that the accounting standards utilize for money, basically, is fund balance. So this is a lot more readable in your package, but what this basically is showing you is the status of the general fund as far as revenues and expenditures go for 2025, and also a comparison to the previous year in 24, and also what the fund balance looks like between the different types of fund balance for those two years as well. The bottom line here is that the overall fund balance decreased by $5 million, but that decrease was planned. The decrease was due to the fact that we had built up, what do you call it, bond proceeds for the fire station a few years ago. And in 2025, we commenced construction, the major portion of the construction for the fire station. So we plan to use that. In addition, the city council decided to buy the public safety training facility last year at a cost of $2.75 million. So that also is included in these numbers as well. And you can see with the general fund, you have the different types of fund balance. We have the operating reserve, which is in all the operating funds. We have a stabilization reserve, which is 10% of all the revenues per code. We also have some other items in there as well. And the bottom number, the unencumbered amount, that is the amount that's not encumbered as a reserved or a committed type of fund balance. It's more or less funding that is there to help us with our bond rating and help us to get through tough times if we were to get there. The next fund, you have the Streets Fund. This fund is primarily funded by motor vehicle fuel tax, which has been stagnating over the past 20 years. That's based on the amount of fuel that's purchased. And also the Capron Fund, which is a special amount for transportation that impacts Island County. and the cities within Island County and also San Juan County. You can see that the Streets and Arterials Fund has a net ending fund balance of about $3.8 million, and that is an increase of about $770,000, primarily due to some grants we were able to land to help defray the cost of planned infrastructure improvements. So we have our transportation benefit district. You can see that that continues to build fund balance. We generated, through sales tax, about $1.4 million in 2025. That was about $200,000 more than the previous year. And that was primarily due to one-time construction activity, which caused sales taxes to be higher in 2025 than they were in the previous years. That's hung over a bit until 2026. But I predict that the Transportation Benefit District sales tax and also other sales taxes throughout the city will start to come back down to trend and start to level off, which we'll go into a little bit later in the presentation. The next slide is the Creative Arts Fund. You can see that the revenues it generates is about $60,000 or so per year, and the expenditures are based on budgeted and planned expenditures in the Arts Fund. It does have a pretty healthy fund balance. It looks like at the end of 2025 it was just under $200,000, and the expenses exceeded revenues by about $12,000, which was planned, which was budgeted for. Right. Next up is the lodging tax. 2% lodging tax fund. We receive in taxes about 325 to $350,000 per year. We have some other revenues that come in there. Well, mostly interest earnings. And we have our expenses on the right under the total revenues. And our expenses are just under the amount of money that we've been bringing in. And you can see that our fund balance through the end of 2025 was just under 800,000. And the next slide is all the other governmental funds. We have a bunch of small funds. We have impact fee funds, debt funds. We have some project funds. We also have our real estate excise tax funds. You can see that we have some plan usages for those funds we have budgeted to use impact fees and REITs over the past few years. We still have a pretty decent fund balance for those different items. Our fund balance stands at the end of the 25 at about $4.4 million. This is the overall eight year trend of fund balance. It's a lot easier to read in your package, trust me. You can see that if you take it from 2028 to 2025, fund balance has been generally increasing in all the funds. The streets and arterials has been It went up, but now it's back down, and it went up again in 25. That's something that I'm going to keep an eye on because we do have increasing cost for constructing our streets that are not covered under the Transportation Benefit District, and the revenues based on the state formula has just unfortunately been flat for the past few decades. So we have to keep a close eye on that one. And you can just see how the trends worked over the past eight years. The top portion of this chart shows the total balance. That's with all those reserves and restricted reserves that I talked about earlier. The bottom portion of the chart are the available balance. That's more or less the unencumbered balances or the balances that are available for a rainy day or for projects and so on. The next slide goes over the enterprise funds, either utility funds and also the marina funds. And the terminology for the dollars is net position. With these funds, there's a big portion of net position, which is basically your buildings and your streets and your infrastructure, your capital projects. The way they do accounting for these enterprise funds is required to be a little different. Let me show you that example with the water fund. So with the water fund, you can see the same comparison between 2024 and 2025. We utilized fund balance in 2025 because we intentionally transferred funding over to the facility and infrastructure reserve for replacement for our water infrastructure and our water structures in order to have some funding in there when the time comes to have to need to replace it. Those were transfers that when we put in the original budget were not done in previous years that we did as one-time catch-ups for these various funds. If you look in, for example, in the 2025 column, you go to net transfers, which is about two-thirds of the way down, you'll see that for 2025 it's almost $3 million. That's really one time for that reason. You won't see that again for 26, 27. What we're going to do going forward is just transfer as close as possible to the amount of depreciation for those assets. That way it'll be more manageable and we will be building things up over time. That's one of the reasons why that number is the way it is for 2025. On the right side of the slide, you see the breakdown of the fund balance for the water funds. When I talked about structures and infrastructure, the largest sub number in the net position is called non-spendable fixed assets. That's basically all the buildings and all the infrastructure. That's just stuff that, you know, it's not liquid assets. The other amounts are restricted for various, you know, there might be restrictions. We have deposits for customers. Those are not our money. It's the customer's money. We also have the operating reserve. We have the system development funds, which is funding that has been built up over time from our system development charges that we collect on new development. And also we have funding that is in the project fund, in the water project fund that's set aside for that. so and then the last number is the unencumbered fund balance so the next four the next four funds have a similar setup i'll go over those sewer is next there we go so sewer is the same it's the same kind of situation with the net transfers the net transfers of about three million dollars was to the Reserve for Replacement Fund. So we have a total use of about $4.4 million. And then you have the non-spendable, which is $34 million. And then you have the other breakdowns of the fund balance or the net position, what they call it. for solid waste, similar situation. You have a net change there of 891,000. This is a little different than the other funds. That's not due to the transfers into this one-time reserve for replacement. not all of it, but a good portion of that is due to the rates being raised by our waste transfer provider, Island County. They went up, it was 25% and then it was another 5.8% per the formula. So what about 30%? But we knew about this. We knew it was going up, and we talked to council about this when we did our rate study, and you adopted the rates last year. So it went up 30%, and we weren't going to go ahead and just capture all 30% in one year, so we did a plan to phase it in. Although I am keeping a close eye on it because our unencumbered fund balance is just over $1 million, and based on how we do in 26 and 27, we may have to revisit that. storm drain is next that's the fourth utility that we have and that also has net transfers of seven hundred and forty one thousand dollars and that is mostly due to the reserve for the one-time reserve for replacements of previous transfers we didn't do that won't be there going forward and that fund balance of the unencumbered is at six hundred ninety three thousand by the end of 25 and the other fund balances are there for projects and the system development fund and also the operating reserve And then we have the Marina Fund. The Marina Fund, the fund balance, if you look at all the way to the right, the last slide, the fund balance has grown to $7.4 million. Of course, 5.2 is the fixed assets, and the remainder are set aside for the operating reserve projects and also unencumbered. The plan was when we brought the marina options to city council and the city council adopted some revenue streams to help pay for future debt service for the marina dredging and also the breakwater, that we would use a good portion of that fund balance to help buy down the amount of money that we'd have to borrow. So that's the plan. And of course, when that time comes, When we get closer to that time, we'll take a look. We'll have more workshops with council, and we'll sharpen those pencils a little bit more to see exactly what it ends up being as far as how much money we need to borrow, what the interest rates are, which do affect our payback, and all the rest of that. But it's just way too soon for that, because interest rates change every day.

Do you want to explain, though, where they are with the B&O taxes and how that's working out?

Yeah, I was going to do that during the revenue portion, but real quick, yeah, but you're right. Since I did bring up the other revenue streams, one of the revenue streams was the local B&O tax. So there was a target of between $800,000 and $900,000 to come in to help pay for the debt service on a future bond, and we are hitting our target. um we we have some great staff who have just been bulldogs i've gone out there and just tried to you know i don't mean bulldogs in a bad way you know like we've been very you know we put a lot of different um outreach on the website we've sent thousands of letters out to the to the community um 99 of the community isn't paying we just had to walk them through doing the form to show zero and non-reporting And for the folks who do have to pay, we provide them as much assistance as we can. And we try to provide them assistance as best we can. When I say Bulldogs, though, it turns out that when we're meeting with these other cities, because now that the city council adopted it, we're allowed into these groups. There's some confidentiality when it comes to this, because they do talk about different companies. So now that we have been having these discussions, it turns out that there's businesses that don't actually have a location in the city, but do business in our community. And some of these businesses are very large national or international businesses. that sell products here, they might even sell services. And we followed their advice. And we sent out letters to folks that we didn't anticipate we'd be sending out letters to and we're bringing, we're bringing home some funding from folks from outside, you know, from outside the city limits, we're doing business here. So. So it's all good. We are definitely on target to, to meet the amount that we did discuss. So next, let's see where we are. Let me just stay on track. That's the same kind of overview for the enterprise funds that we had for the governmental funds. It's pretty busy on the slide if you just look at it on the screen, but in the backup, which anybody from the public can download, by the way, it's a lot clearer. And generally, the funds are... They're growing. I mean, they did hit a peak last year. But remember, we are transferring money over to the reserve for replacements that was sitting there for that purpose. So that's the major reason why it decreased from 2024 to 2025. So next, I'd like to provide you a comparison. This is the second of the three sections. This will be quicker. A comparison of how the city of Oak Harbor is to all cities within Washington. So the state, oops, sorry. The state auditor has a fiscal intelligence tool, which is on their website, which anybody can just go and utilize and look into the last four years of actual results, whether it be revenues or expenditures, for any governmental agency. I sorted this for cities and towns, and there's 281 on this list, but you can look at... special districts, school districts, port districts, anything you want on this website. So if you look on this particular slide, you'll find that out of those 281 governments, 33 have not reported for 25. We have, but 33 have not. And I know a few of them that are nearby, I want to say. Hopefully they'll get it in. Of the 248 that did report that have, well, three of them don't have enterprise funds. Watch why that number is less on the bottom. But of the 248 that governments that did provide their information, you'll see red, you'll see this orange color, and then you'll see green. 62 of the general funds are in the red, which means it's a major warning sign that they need to keep an eye on the general fund. The oranges are like, just, you know, things are starting to change. You might want to keep an eye on it. Or there might be reasons why it's orange. It might be a one-time thing. It'll probably go away the following year. So that's about 25% in the red and another 25 or so percent in the orange. For enterprise funds, there's a lot more in the red. It's almost 40%. Those are your water, sewer, and marina-type funds. And the next slide shows you where we stand. This is a lot easier to read in your package. But we actually, we didn't have any orange indicators last year. Now we do, but it's for the reasons I talked about earlier. So the green indicators first, it's at the top of the slide. So the green indicators are fund or cash balance sufficiency, governmental fund sustainability, The current ratio, which is a financial term to say how many times current assets can cover current liabilities for governmental funds. And current assets just means assets under 12 months, like liquid assets, not buildings, stuff you can liquidate. And current liabilities means liabilities you owe in the next 12 months. That's accounting speak for that. And then debt load, which is self-explanatory. Now the orange indicators are the general fund, but I looked into it and I was like, why is it the general fund? And it's because We were green the last bunch of years because we're building up money with the bonds for the fire station and for just other good financial practices that we've been doing. But now that we're spending money, the mathematical formula shows, oh, negative 5 million. But in reality, this has been planned. It was built up over the time. And for water, solid waste, and storm drain, There's also an orange, and that's basically because we did this one-time transfer for the reserve for replacements, although we're going to continue it at the normal level. That was just an extraordinary transfer. And also solid waste. It's because we have that big expense from our waste transfer providers. And real quick, I know there's an orange indicator in all governmental funds, but that includes the general funds. General fund is a subset within that group. So it's really got five indicators, but it's really four. But anyhow, I don't want to get too technical. I guess I should ask for any questions between, yeah, sorry, I didn't. Are there any, before I move on to the revenue section of this event, are there any questions on this section or the previous section about fund balances?

Council Member Peterson, yeah.

Thank you. So under the green indicators when it talks about current ratio?

Yes.

And that is the how many times a current asset can cover? What's our number? How many times?

Do you know? I have to log in, but I'm running. Oh, yeah, we do. We can log in right after this item. I'll log in and, yeah. So what they do, when you look at the screen, there's like a line. And the line's like, you should be over this line to not get an orange. And we're above that line. So...

Okay. Okay. All right. Thank you. And then I guess I don't understand, and you're so brilliant at it, where general fund, four indicators, and then all government, five indicators. I don't understand.

Could you? Yeah. So basically, under general government, there is – so the four indicators are fund or cash balance sufficiency. The second indicator is governmental fund sustainability. The next one is either current ratio or debt load. I think current ratio might only be for the enterprise funds. But I mean, if I was logged in, it'll show you when you log in, the four for the governmental funds and the four for the enterprise funds. There's one that's different between the two because of the different ways they do accounting. Thank you. Yeah. I think. Yeah, sorry. I just didn't want to overload that. Could we have like 50 slides? I didn't want to. No, no, no. This is it.

This is a big amount of information, and I only say I think because it's a lot to understand, and you're so good at it. So I appreciate that.

Any other questions? Council Member Wittgenstein has a question.

So with the general fund revenues kind of flattening out relatively, how does that look for us in the future?

Well, we're going to go over that in about eight slides because I have all the general fund revenues together. And the thing about it is our expenses, just like everywhere else, especially other governments, they continue to grow. Steve Shuler provided me this cost for construction index a few months ago, and it just shows how much construction has increased over the last decade. five years, if not 20 years. And like I said before about streets, just the fact that the state has this formula that is not growing, or if it is growing, it's barely growing. And the cost of just constructing streets have probably doubled, if not more, over the past 20 years. You know, there are cities out there. I mean, we go to these meetings with the Association of Washington Cities. We listen to what the other cities are saying. And there are some cities that are extremely hurting. And they are desperately looking for ways that state legislatures can go in there and just find a way to make things sustainable for local governments. We're not there. You know, but we do need to keep an eye on things and to ensure that we don't end up there. You know, but that is definitely one of those things that, but you talked about the general fund specifically. So expenses continue to go up. We're keeping a close eye on that. You'll notice that, well, we're working on the budget and you will have the budget in a few months because we have a lot of numbers to put in there. Plus we have a whole new chart of accounts with our ERP system. So it's a lot of work, but we're going to get in there. But we have been working with the mayor and the administration, all the departments to bounce ideas off each other, to listen to each other about, okay, the city council adopted this. They went to a retreat in January and they adopted their goals and priorities in March. How can we make sure that what we're suggesting, that we're proposing for this budget, meets their vision that they put forth? And you're going to see that next week. At least you'll see a semblance of that for the capital projects next week, which are a portion of the budget. But that's what we've been really focused in on. So we'll get more into that as time goes on. You'll see how that's going to work out. You got it.

All right. Continue on.

All right. Thank you, mayor. So let me just, I got two things working at the same time here. Yes. Let me, it fell asleep. There you go. Revenue trends. So this is the third portion of the, of the presentation, the revenue trends for major revenue sources. Yeah, you might want to just click it. It's not working. All right. So the revenue trends that are shown for selected revenue is very similar to what we do every year. The monthly, so something I added were these monthly historical trend charts, which, and those are shown for revenues that exhibit volatility or seasonal characteristics. It didn't make much sense to show this chart if everything's flat for the last five years. I wanted to show a little bit about how the timing of revenues plays into how we, you know, our fiscal sustainability. And also, you'll notice when you see the number 2026, there's going to be a big drop. because we're halfway through. I have my projections, which are early, which are my best estimate based on the data I have now. They're going to change. They've already changed since I printed this out last week. But I have those projections for 26, 27, and 28, which are the two budget years, for the various revenues. But just keep in mind, when you see that dip, it's only because that's the actual amount we received for half a year as of a few weeks ago. So first off, and the... the most important one that we have in our general fund are our property taxes. Those are expected to slowly increase by the 1% a year that the council is permitted to approve it grow, plus about half a percent for new construction. Because the idea for that is that new construction should try to pay its own way. So if new construction is occurring where people are coming in or where there's more traffic or more businesses, some additional revenue should be able to be raised to help offset the additional expenses the city has to expend in order to handle the services that that new construction would require. You'll see in the middle there was a huge jump in 23 because the voters approved a levy lid lift for the fire station response time improvements. That was to staff and also provide the operating and maintenance expenses for fire station 82. The next slide, oh, there you go. Thank you, Tim. The next slide shows the volatility of property taxes. We get it twice a year. You know, we get a little bit before May, a little bit after June, a little bit before October, but mostly May and November is when we get it. Some cities are very heavily reliant on property taxes, and some cities have to go on the line of credit until that money comes in just to pay their bills. We are not there. Next slide. Sales tax. So this is projected to decrease before leveling off at 25. So you'll notice that at 2025, that bar is about a million dollars more than the previous year. I looked into that when I was doing my projections. I'm like, wow, can I just keep that number and keep going out? Well, that would be irresponsible because when I looked into the different industry components of the sales tax, I found that one particular industry was elevated. I looked at the last eight years, and all the charts were low, except one time in, I think, 2018. And then all of a sudden, it's up again. It's construction. And it's mostly because we We have the fire station 82, it's all, everything's taxable, so some of it comes back. But also the schools, those schools were constructed last year as well. And they have to purchase equipment and they have to pay their suppliers and everybody, so that's taxable. And also there's some development occurring as well, and that construction material is taxable. So construction is very volatile, and because of that, I'm being conservative. I'm projecting that the 2026 numbers are going to be in lower than 25, and by the time 27 hits, that we'll go back to baseline and start growing slowly again. And if you go to the next slide, you can kind of see what I mean. It's much better in your package. Of course, if your package is black and white, it's not going to help. But I have the last five years per month, and you'll notice maybe if you can see the colors, that in 2025, the brown line all the way in the left where it says 450,000 in January, That line was higher than the previous three years, and it stayed elevated throughout the entire summer until the rest of the year. And then the red line all the way to the left, January, about near the $500,000 mark, that picked up, and it's continuing this year, almost the same trend as last year. I'm anticipating that is going to start to come down by the end of the year. And also, if you ask me, wait, Dave, it's July. How come you're showing this through May? Because sales taxes come in two months delayed from the state. Because they have to collect it, then they have to do their math and make sure it goes to the right people. So I shifted everything over. But in reality, if you looked at our books, you'd see, like, numbers in July, but in reality, those July numbers are May. Just to clear that up. And that affects the TBD. It affects the other funds which have taxes. So that's your sales tax. Next slide. This is the utility tax and franchise fee. So overall, we're looking at this expected to increase slowly. The utility taxes that are on our own city utilities are gonna go in line with our fee schedule that the council adopted. And our electric utility, actually, those numbers are coming in better than we had budgeted. But that's, I think, because I don't know if you've seen your electric bill lately, but I think the cost of electricity has gone up. Because the cost of electricity throughout our departments has also been elevated. So I think that's part of that. But there's other things which aren't growing. Like telephone is just not growing. People are cutting the cord, I guess. And cable, too, is just flat or not growing. So, you know, that's the trend. But overall, you know, it's kind of flat, except for 25, which was kind of a bump up. It's pretty much going to grow at a, I'm predicting a slow rate. so you have utility revenues of these are the you know the utility rates that we talked about uh... those are expected to grow at about four or five percent a year some utilities like solid waste will grow higher because we have to you know pay for the waste transfer and that's what the council adopted and some will grow slower because it's just needed to catch up with inflation but not needed for an extraordinary increase in cost like with solid waste next slide development related fees so this one I just want to call out, I'm probably the only one who noticed, but look at the 2026 bar, the fourth one from the right. Remember how I said 26 should be lower because it's half a year? For some reason, it was an old slide. It ended up copying the 2026 projected. The P means projected. In reality, I ran it right before the meeting. That number is about half. So where you'd expect it to be, it's about half the year. Just want to call that out in case anybody noticed besides me. Now, in 2024, remember how I said We're getting all those sales taxes from the construction. But what happens is the developers pull those permits before they go to construct. And you'll see in 2024, that's what happened. We looked. And this is not just money coming into the general fund for building permits or development permits. This is money coming in for impact fees. This is money coming into some of the utility funds for development-related fees. And that's a banner year. That's a large amount. We don't anticipate that continuing, which is why we have the numbers coming back down to Trent. And oh, here's your, remember how I said, I'll be showing like for some of the more volatile revenues, I'll show how it looks. You can see that those green spikes, that's 2024. And that is the construction. We got a bunch of funds in March and we got a whole bunch more funds in August or September. And 2026 is the purple one, and it's also a little bit of a spike. A lower spike, but it's still a little bit of a spike. If that spike occurs again, my projections might be too low. But I like to be conservative. I don't want to overestimate. And the next slide. Here are your streets revenues. Like I said before, it's projected to hold steady. I'm hoping that it increases by 2% a year. It has in some cases, but it all depends on the state formula. We're keeping a close eye on streets. And then... Only a few more slides. We have the lodging tax, which this is the lodging tax 2%. This we're looking at just kind of growing with inflation and also with the price. As the price of a hotel room goes up with inflation, then we get a little bit more tax revenue as well. And also as we have higher occupancy during events or whatnot, it also translates into more lodging tax. And here's your seasonality. For lodging tax, there's significant seasonality impact. You can see that for the past five years, during the summer is the busiest season and it reflects with the lodging tax. And then we have investment earnings. So this really saved us in a large portion over the past four years by our investments. You can see back during COVID, we were earning like nothing. But since 2023, we've been doing really well. I don't anticipate that lasting because the Fed did cut interest rates a few times. The outlook is mixed. Some people say, yeah, they might raise interest rates, they might lower it. And our investments earn based on that. The majority of our investments are tied, half of our investments are tied to the federal funds rates through the state investment pool. So when the Federal Reserve lowers rates, it affects how much we earn. When it increases rates, it increases how much we could earn on half that money. The other half are invested in... It's per the investment policy the council adopted, but basically safe, highly rated treasuries or agency debt, like federal agency type debt. And those are... Some of those are like two or three years out and we were able to lock in rates before they dropped. You know, there's things like that. So we kind of do a little bit of a mix to enhance our, just making our money work for the city so we can have less reliance on the taxpayers as much as we can. And then here is the overall general fund. This is something that, next slide, that Chris alluded to a little bit earlier. Sorry, council member Wittgenstein. Thank you. I'm so bad with names. I'm sorry, Wittgenstein. So you can see that in 2025, the general fund as a whole was about $28 million. 2026, we're projecting for it to be a little bit over that. And then going out, we have it going down, mostly because of our investment earnings and our sales taxes. Some other ones are going up, but it's, you know, overall it's kind of flat. We're hoping for the best, but, you know, it just looks flat. And our, you know, inflation is out there. It impacts things we buy. We have bargaining agreements with our partners. You know, bargaining, you know, our unions and bargaining units, they call it in government. And those go up, too, per what was agreed upon. So we have personnel costs going up. We have, you know, we have health care. We heard from our health care insurer that it might be going up by double digits this year. There's various things we keep hearing about. The expenses are increasing and it's all the way around, not just City of Oak Harbor. We're keeping an eye on all that. Our outlook, our city financials are stable. We're going to keep a close eye on sales tax investment earnings, development and real estate related trends. We'll keep a very close eye on our streets fund, our solid waste funds, and also the overall general fund. And we're hoping specifically for the state to adopt a permanent fix to the transportation funding that plagues all cities and counties throughout the state. So with that, that's it. Staff is available to field any questions you have. And feel free to provide input.

Great. Thanks, David. So first, I will open the public hearing, confirm no public comments have been received. Sabrina?

No, there have not, Mayor.

Great, and is there anyone here with us this evening that would like to step forward and make public comment on this issue? Hearing, seeing none, I'm going to close public comment, or close the public hearing, I'm sorry, and then call upon council for their comments. Council Member Merrill.

The complexity of the statistics and the accounting with regard to coming up with these numbers, I have just a taste of what's involved in that. So I wanted to thank the finance department and David, especially you, for putting all of this in numbers, I mean in graphical representation, so that we who are not accountants can understand it fully. And also I would just commend that with regard to the variations in the fund balances and the declining balances that uh... my understanding is that this is completely expected correct

Yeah, the ones that you saw are expected. It was planned for in the budget.

So I wanted to comment on that because that's exactly what we need in the city is responsible use of funds. And if we're just sitting on money and not putting it to the use of the city, then that is a waste. So I think that that's commendable that we're moving along that track and that we should be expecting to see expenditures rise, although I pity Public Works. Because I understand that. I mean, that's just one example of the exponential increases in expenditures. And of course, I have all these notes and I'd love to speak on them, but I'm not going to. Thank you, Mayor.

Yes. Next, anybody else? Comments? I just want to remind everyone, too, that it's important to point out that we are setting those monies aside for replacement funds, too, for assets. That's something that we've never done as a city before. So we are setting ourself up for success going forward. So that's part of the reason that you have some of those orange numbers or lines. All right, with that then, that was just all the information. So we will do this again, I guess, next week and we'll be going into capital expenditures, right?

Yeah, correct. All the departments will make a presentation, and we'll make sure they stay brief. Okay.

All right. Next up is ordinances and resolutions. Proposed ordinance number 2047, adopting a new Oak Harbor Municipal Code section 1.04.050 relating to student representatives. And here to introduce this topic is our city administrator, Sabrina Combs.

Good evening, Mayor and Council. Thank you, Tim. Tim, I'm going to let you operate the slides since we're having problems with the clicker. I'll save a step. So I am just bringing this back. We had talked about it at workshop a couple weeks ago. And basically, this was an idea that came from Mayor Wright through researching with other communities that have done things like this and also wanting to promote an opportunity for our local students to be involved in council and government process. Next slide, Tim. So we drafted the ordinance, brought it forward to you so that you could see it at workshop and give us some feedback. And we believe we have addressed the feedback that you had. So some of those were confirming the students that were in quote unquote good standing and could participate. So we've listed the schools for you. And that does include the high school, the alternative schools, some of the other schools that are available for learning, like the Learning Online Academy that's available as well. So we have included those items to make sure that that was clear. But again, we're still working from the list that they have and then utilizing those applications for us to look at and review in order to bring forward. So next slide, Tim. So the plan is that students would attend regular meetings. And of course, we are having some awareness about their schedules, because as we discussed, that sometimes can be challenging with the schedules that they have as students nowadays. They have a lot on their plates. We are not requiring them to attend workshops. or retreats or joint meetings with other municipalities. We did look at some of those concerns that had come up and make sure that we were addressing that in the requirements. Then they would not vote on matters before council, but they would be able to share their thoughts and opinions. It's very interesting because As some of you mentioned Nolan, Nolan and I ran into each other at National Night Out, an awesome event, and he shared with me how fantastic it was to be involved in the city and how excited he was to see that this was something that the council was looking at. So I thought that was really good feedback from somebody who's worked in various avenues involved with our council and government.

And the next slide.

So this will be the first year of this program. My big thing that I've been talking to council about when I've been meeting with them is it's a first year thing. We wanna look at this. We did add the element of having some of you on council meeting with the mayor to meet with the students to do the selection process. But again, we're gonna go through it this first year and then potentially identify things as a group that we might wanna change going forward. So this is the first year attempt at doing this. So here is the suggested motion on the screen. And the Oak Harbor Municipal Code was part of the packet that you had in the agenda.

All right. So before I turn it over to council, I'm going to first confirm that we've received no public comment on this issue.

No, Mayor. We have not.

OK. And is there anyone here with us this evening that would like to step forward and make public comments on this issue? All right. Hearing, seeing none, I'm going to close public comment and call upon council for their comments at this time. Yes, Council Member Stuckey.

A couple questions. In doing a little research on this, there are indeed other Washington cities that have a student representative, but most are a lot smaller than us. In general, in your opinion, what do you attribute that to? I mean, I don't see many... I mean, they're mostly cities of, like, Sultan and, like, a couple thousand people. Not that we're huge, but...

Yeah, I can't think of a direct correlation. I'm sure it has something to do with the staff's involvement. When I went to my conference last week, I talked to a couple people who said, it's pretty cool that we're working on something like this. It's neat to see that we're getting students involved in the process. So I think it is that there's some work involved in this. So it's an extra step that you have to do. And with the other agendas and items you might have on your plate, that may be challenging for some folks. I do know that in my conversations with council members this week, there were some conversations about different setups, you know, opinions and thoughts that they'd heard from feedback. So I think there's all kinds of factors that play into why those decisions are made. Mayor?

I was just going to say I'll piggyback on that by saying that through Wasele, I've already forwarded all of our information to five other cities who want to follow in the suit. So it's just a matter of I think that they haven't done it and they were looking for some help or like a push. So... but more people are looking at it, yes. And they're bigger than us even, so.

I don't see, and again, this would be pretty extreme, pretty controversial. I don't see a mechanism for removing a council representative.

I think, again, this is the first year of doing this, so our thought was, see how the process works. Work with the student to be involved. It was more of getting them involved in the process of sitting here, commenting on items that are issues and things like that. So we hadn't really worked towards that. And from our conversation at workshop, that wasn't an item that we were looking at examining. Because again, we were trying to make sure that it was also accessible to students.

Okay, yeah, the only reason I may, I mean, I don't think that we would necessarily get a student that would come in here and be disruptive, but what I would hate is someone say, yes, I'll do it, be all jazzed about it, show up for the first meeting, and then just go AWOL, and we have then no mechanism to remove them and replace them with a different one.

Yeah, I think we can talk about that again. That's why I really focused on it being that this is the first year we're doing this, and I think there will be some lessons learned out of that, and maybe that's something we incorporate in the next phase as we roll this out further.

And then... As far as this one change, I would like, but it's just a one-sentence change, is the administration will provide a list of student applicants which will be reviewed by the mayor and a panel of one or two members of the council prior to appointment. Can we just change it to two council members, not one or two? I mean, considering that we're not gonna get an opinion, we're not confirming them, which I understand, can it just be two as opposed to one or two?

Yeah, I think we were flexible in the language because sometimes, you know, we're all busy and we don't want to prevent or delay the process because we try to get two in the room and it's just very hard to schedule them. So we wanted the flexibility. But that is a language change we could make. We were trying to address making sure with all of our schedules that we could get those folks in the room. So that was probably the consideration by staff in drafting.

Okay.

Yeah, I would strongly prefer it to just say two. And between seven of us, I think that we can get two people to do so. I would just like it to be changed.

I would agree. You would think we could do that, but sometimes it's impossible.

We try really hard, and I'm going to own that scheduling is a fun, especially when we're scheduling students around their schedule as well. So if for some reason one of those council members drops out the concern would be we didn't have two people in the room because the person who's been sitting in those meetings and I say this is somebody who sat on panels for interviews for some of our director positions that can be a challenge.

Well, if it's Council, we need to step up and make sure two people, because I'm pretty strong on there being two individuals, considering this is a Council meeting. Considering they're going to be up here with us, considering this is a Council meeting, I think we need to have as much participation as possible. And I don't like the ambiguity of one or two. I just, two. That's my thoughts.

Thank you.

Council Member Wiggins, time. Do we have a procedure in place for our advisory boards and commissions for removing somebody?

We do. It has to be several for the, I believe it's the uniform policy. So it's several meetings that there would be a concern. At that point, the chair typically talks to the mayor. Then the mayor will have a conversation with them, and then they may notify the person about the fact that they haven't been attending, and then they go from there. I will admit that in some cases, though, that person will say, oh, I've had work commitments, or I've had something come up in my personal life. And so usually there's an extension. Because again, these are volunteers helping out the city. we try to also work with people when those situations arise. It's been in rare occasions that we've had to say we're cutting it off and usually it's because of severe medical situations that have occurred or things like that that have happened.

It's better to be prepared for what might come versus to wait for it to get here and then respond, correct? So I'm kind of with Councilmember Stuckey on that piece of just having something in place and we already do have something in place that we could just line up with this and it shouldn't be challenging at all. But if it's not in place, then what are we doing, right? I would hate for us to get up against the wall before it and not be prepared to climb over it. So I'd like to see something in there for that.

My turn. Anybody else? Yes, Council Member Marshall.

Thank you, mayor. Um, I don't know what time all the advisory committees meet, but do they all meet after school as well? I mean, I understand that we are not requiring them to be here at workshops because they can't because they have school. But I know like the parks and rec commission, for example, they meet at 10 AM and we have a student advisory and that's, that's something that's been kind of a point of contention for me is that we, we're not, we're not, um, accommodating to that person, you know, that could be a student representative. And so is that something that we look at for our advisory commissions that, you know, we may look at time requirements for those so we can make sure that we have student representation on those as well.

Yeah, it's something that comes up to the advisory board. In fact, recently we just had a discussion about the MAC board, the Marine Advisory Commission. They had had a conversation about the time that they meet. I know the Parks and Recreation Commission that you're talking about has moved to later times, earlier times, later times, earlier times. It's adjusted at different times and in fact that was a conversation that came up when they decided to go back to earlier, if I remember correctly. So there was a discussion about how will this impact the student involvement. So that is something that is a concern and that's why we were trying to, based on the feedback we had here and in conversations with the school district, be aware of that when thinking about our workshop time. Because our workshop is earlier in the day during school hours typically.

Okay, so I know that we have a mechanism for trying to find this student position coming from the school board or from the school administration. Is there any way that they could help also to advise for people to fill these other vacancies that we have?

So that was part of the plan, was that if we're doing this system, that we would also utilize this to say, hey, students, this is another opportunity that you can serve on through these other advisory boards that we have. So this would be another pipeline of students that we could access to tell them about that option.

Maggie has also, obviously, they're on vacation right now. But we have a message into the civics teacher, is that her title? I don't know. Yeah, she works with the students. But anyway, so we are working with her too as soon as they're back. I think they're back next week.

Okay. Yeah. And then my last thought was I agree with Council Member Stuckey. I would like to see the wording to say to council members just to have that. Just so we have a little bit more of a say in who's going to be sitting up here with us. And I think that's reasonable. Typically, when we do the advisory commission interviews, we have three or four people that sit on those advisory board commission interviews. So that's it. Thank you.

Anybody else? Sandy, did you have a question?

At one point I was going to just comment that when I originally heard this, I wasn't as in love with it as I am now. I originally thought it would be better to do a council of students as opposed to just picking one. I talked to some of my younger students. family members and they're like, oh, you don't want to do that, mom. You're better off doing one person as opposed to a council because you'll never get them all together. I'm like, okay, well, never mind that. But I am more happy about this whole idea. One of the things that they talked about in that 13 Ways to Kill Your City book that we got at AWC was to not include your young people. and their ideas so But I so I agree it's a much better idea than I thought it was two weeks ago just just because I thought about it more I Agree with councilmember Marshall and Stuckey that two people from council should be on the on the committee to help pick and I I don't know how much I'm worried about putting something in this ordinance about the mechanism to remove a student because if they don't show up, they don't show up. It's a volunteer position. I don't know. how married to the whole idea of adding something to that that's not already in our city code. So that's all. Thank you.

Thank you.

So my one question mayor for council would be for the edit for the two. Did you want to do that as part of the motion?

I was going to do that. Okay. Sorry. No, that's okay. That's perfect. You take it. Go. Yeah.

I just want to make sure that we have it. Otherwise, we'd be coming back.

I think that they're unanimous that they want the two. So that's definitely, we want to edit that to include two. But then I think that they're not all in sync with putting a mechanism on there. So I'll leave that up to them.

And again, do you want to try it in this first year of doing this? And then when we come back to this, see if we can add the mechanism that has been requested. So we can add that to the action list for the future.

Yes, go ahead, Council Member Peterson.

Well, you're the two who wanted the mechanism. Is it you two? So since we already have that in an ordinance, do we need to add it to this one? I just don't know the way we would do that since it's already there somewhere. So Sabrina, can you?

It would be in the motion of the language, which is why I'm saying you could approve the motion with the change to change the language from one or two to two specifically. And so that's an edit that we could make. So the question is with the other item, because that would take a little more rework. Mayor, did you have a thought?

Do the same rules on the commissions apply to the students that they do to the commission members?

We hadn't tied those together as the advice, from what I recall.

So then we have the same issue on the commissions, too. I mean.

Except you have something already.

I think the point that Mayor's trying to make, though, is that with the commissions we have been fairly graceful in working with people because, again, it could be work. It could be a medical emergency that happened to your family. And again, these are volunteers. These are not people who are receiving a paycheck to do work. They are coming in to volunteer to participate on something. I also don't have a vote.

Again, I wasn't trying to say we're setting to take people off. I'm trying to protect the city by making sure we have something in place when we go out the gate with it, not when we wait until something happens or, no, evaluate it next year and see if we actually need it. We have it in place for a reason. Yeah, people volunteer. We want to do everything we can to keep them here. But we also need to make sure we have the procedures in place to fill the seat again if somebody does stop coming. So if they stop coming, and all of a sudden we have an open seat six months down the road, and another kid decides he wants to do it, or she wants to do it, or they want to do it, how do we put that person in place if somebody else is already sitting in it? So that's my reasoning.

So Hillary, do we just use the same language that's on the commissions? But I guess my question was, the students aren't really being held to that standard anyway. So I'm confused.

So I'm reading your uniform policies for boards, commissions, and committees address a student member in 2.65.070, and I know none of you have it up right now, but there's a term section that gives them a year, and there's a section about attendance policies that that provides for removal under 050, which would apply to all board and commission student members. So your boards and commissions have coverage for their student members already, but if you adopt this ordinance as written, you're not going to have any sort of special provisions for removal. So there's a couple ways to manage this, as Sabrina and the mayor were sort of jockeying earlier. You could make the motion as suggested and include, you know, the clarification that, you know, you move to approve this ordinance as written except for you'd like it to delete the words or one or in that section. And then you could approve that and then staff could come back to you with an amendment adding to the proposed language a provision for removal. Or we could punt this to the next meeting, table it to the next meeting. Sorry, not a legal term there, punt. And they could bring you back a revised proposed ordinance, adopt it all at once cleanly, and have a new proposed motion at that time, which might actually be preferable and cleaner to just wait on it to have staff do their revisions to create a mechanism for, I don't know if it would be the mayor's discretion or the mayor's recommendation to remove um, a student, a student member who's, you know, you can use the same attendance criteria perhaps, or, um, I don't know, it might be interesting to hear what council has in mind in terms of who would be the decision maker to remove that student member and if there would be criteria laid out like you'd have in the uniform policies for boards, commissions, and committees in 2.65.050, um, I actually haven't seen this be a problem. Usually when a student member stops showing up, they'll voluntarily resign and everyone agrees it's the right thing. You know, what if they move? What if they become disinterested or too busy with other extracurriculars? And then a new member is just appointed at that point. So a lot for you to consider. I'm happy to answer more questions.

So I just wanted to clarify, we can't do all of the changes right now, which hints why government moves so slow. So...

You could, but we'd be here for quite some time rewriting the ordinance.

No, I don't want to do that. I think the suggestion, we want to just adopt what's already in place for our other. That's what you guys are looking for. You want it to be the same as what's in the commissions? Yes, Council Member Marshall.

Thank you. For me personally, it's not that big a deal. I mean, I think that, you know, Hillary kind of talks about it is if somebody is not showing up, then then we can have a conversation with that person and say, you know, are you going to resign? Is there a reason why you're not showing up? And then if we see that this becomes a problem, then we can in a year we can reevaluate this. But. But for me, I think that the caliber of students that we're looking to get to do something like this, they're going to make a commitment to show up. And if they don't, then that's a conversation that we have with them. And if it becomes problematic, then we can address this at a later time. But for me, I think that we are going to get a high caliber student. And we can move forward with it personally.

Well, that's up to you guys. This is, yeah, so one second. I'll call back on you, Council Member Stuckey. So if that's the case, then we just need the motion with the amendment to change that to two council members, which I think you are all in agreement on. So, yeah, Council Member Stuckey.

Yeah, I was going to say the two council members is the only thing I'm firm on. The other one, on the one hand, again, I agree with Council Member Marshall. We're probably going to get high caliber students. They're pretty highly vetted. I'm not really too worried about one coming up here and not acting appropriately or something like that. You know, the attendance could be an issue. I mean, on the one hand, I agree it's probably no biggie. And a call from the mayor of like, hey, you haven't been here for a little while would probably be sufficient to fix the issue. On the other hand, if it's an hour to a staff time and bring it back up next meeting, to me, that also doesn't seem like that big of a deal. So I'll go with the majority on which either with the exception of the two. I have a slight preference to just do it right the first time, but I'm not hard on it. So.

Council Member Romero.

So I do approve of going with the two at this time. And I'm especially mindful of the fact that Council Member Marshall has practically an adult lifetime in dealing with students and having to boot some off of teams and things of this nature. So we got the strong arm to do it if need to. All right. Thank you.

So I think the only person we haven't heard from is Council Member Arms. Do you want to weigh in on this, or are you good?

I'm good. Whatever you guys decide. I think it would be a great idea. We might as well put it into practice today instead of waiting again. Thank you.

Oh, I'm sorry. Mayor Pro Tem, did you want to weigh in on this? I excluded you because I don't have you sitting next to me. I'm sorry.

No, that's okay. I don't have anything to add. I agree with everything everyone said so far.

All right. So if you guys are in agreement and you want to move this forward tonight, the motion with the friendly amendment needs to be made, and then we can move forward or we can table it. It's up to you. Yes, Council Member Marshall.

I move to adopt ordinance number 2047 with the amendment of two council members sitting on the approval committee adopting a new Okraburn Municipal Code section 1.04.050 relating to student representatives providing for severability and establishing an effective date.

Second.

Yeah.

Technically we don't have to amend a motion that has never been made.

Amending the ordinance, as it's written. Oh, the ordinance. Yes.

All right. So we have a motion to approve ordinance number 2047 with the amendment of two council members. So we'll make sure that that's included. And then that was seconded by Council Member Romero. Is there any further discussion before I call for a vote? Hearing, seeing none, all in favor, raise your right hand or left hand. All right. That passes unanimously. Thank you very much. That was fun.

Thank you, Council.

All right, next up is contracts and agreements. We have a facility use agreement with Mariner's Haven, and here to introduce that is our harbor master, Elise Henry.

I'm sorry, it's four slides.

good evening council and mayor I am gonna keep this fairly short and sweet so background for you guys Mariners Haven uses the launch area not the float itself a lot of the times ramp and float are one in the same terminology of when in fact they are very different but that is within the city of Oak Harbors marina Department of Natural Resource lease boundary so in case you're wondering why we have the authority to ask for this agreement And it is the only launch area that they have for their business So there is no previous formal facility use rental agreement any kind of memorandum of understanding and we're just looking to make sure that in the case of an unsafe situation the city's not liable for things going sideways and So just in case you're wondering, Mariners Haven is located on the right hand side of the photo. The launch area is located kind of middle of the photo there. And you can see the float along the launch itself. Currently, the only fee structure we have is a commercial annual pass, which is $163.50. That's a base rate of $150 with state leasehold tax of 12.84% added to it because it's an agreement of more than 29 days. and the current agreement that we have written that was included in your packets would be backdated to oh no that's today just kidding sorry it starts today and we go through august 30th of 2030. we can with 10 days cancel this agreement with writing at any time and just to kind of give you an idea mariners haven launches and retrieving retrieves approximately 100 boats a year And if you break that cost down that's current, a rough estimate is about $13.63 per use. So I have a recommended motion as well. But I am happy to take questions, comments. I will say we are looking at a master fee schedule change for 2027 regarding that commercial pass. It would become a monthly fee, not an annual fee. So you'd be looking at $163. 50 per month instead of for the entire year. And that will be coming to you through the budget process that we've got coming. Because I know that's going to be a question.

All right. I will first confirm that we receive no public comments on this issue. Sabrina.

No, sorry.

All right. Is there anybody here with us this evening that would like to step forward and make public comments on this issue? All right, hearing, seeing none, I will close public comment and call upon council for their comments. Questions? Oh, Elise, yes. Council Member Stuckey.

Who else is paying this fee currently? Like, I don't need specifics, but can you give me examples?

Yeah, so commercial would be fishermen that are not in the marina for greater than 30 days, because part of being a marina tenant is you get to use the launch area for no additional fee. Or if we were to attract some more commercial activity, which is something that I'm always looking at, It would be someone like a boat broker or a boat repair that may need to splash. I know is not the right term, because that's the boat term, not the technical term. But launch it just long enough to make sure the motors run, and then pull it back out. So commercial use at the marina currently is very limited. So that's part of the reason for this fee change.

And with this, if I'm understanding correctly, most of this is coming down to liability. I mean, $163 is making very little impact on the city budget. That is correct. I guess my only concern, because again, this is such a low amount that it's not really worth debating for hours on end. This locks them in that cost for some time, correct? Correct.

The cost is not actually discussed in the agreement. The agreement is purely just to use the facility.

Because I just want to make sure that if for some reason it gets raised on everybody else, it also got raised on them. I didn't want them being locked in to that cost, even though we're talking about not much. I just want to make sure it's fair more than anything else.

This is purely for the facility use aspect of it. I just wanted to make note that the cost will be changing.

And then also, is there anything that brought this up particularly?

there was I'm happy to share there was a vessel probably about 60 feet sitting on the launch ramp when I came into work one morning they tried to haul this vessel out on an outgoing tide I'm actually not 60 feet sorry more like 42 my bad still larger than supposed to be on the float itself their signage that they were docked right next to that says 28 feet or less That was how the dock was damaged previously, was due to a vessel that was too large sitting on the dock, banging against the dock for about five hours. It snapped the piles. Then you all know that fun repair that we went a crab season without, and it was not a fun crab season for anyone who worked at the marina. This was continuing as they're pulling this boat out. They actually had to get an additional truck and strap it to their truck and trailer and try to pull this vessel up the ramp completely. There were other users of the ramp at that time as well.

In that case, we wouldn't have had much in the way of recourse because we didn't have this agreement.

That is correct. I want to make sure that that's not the case moving forward.

I appreciate you looking out. Thank you.

council member Peterson I I'm a little confused I thought I just heard you say that there's no time limit on this there's but it's but and I also thought I heard you say that there would be a change when we have the new 2027 So that's a master fee schedule change that's coming. So why is this agreement linked to August of 2030? I'm confused by that.

So that agreement time was something that Hillary and I came up with just to start this agreement so we could get something in place. The master fee schedule does not play any part in this agreement. I just wanted to let council know that the fee was going to potentially be changing and that it would be your decision to change it. That's all I was letting you know. Because I understand $163 for the year is very low.

So somebody help me understand. Sorry. I guess we're saying the same thing.

The master fee schedule, it's an annual process. And it's part of the budget right now. I'm working with all the different departments that have a fee in the schedule. And we're going to be bringing to city council an update to that in the next few months for consideration. And that will work its way into the budget process so we could know how much revenues or estimate how much revenues to put in the budget based on that. And this, what she's discussing, is just one of many fees that will be within the master fee schedule. But I think the topic tonight is purely the agreement, right?

That is correct. It is purely the facility use.

Yeah, just so we can get the liability in place and everything.

So Sandy, it's what we're going to pay the facility to use that, right?

They would be paying us to use our facility, yes.

But then what we charge people will change.

Correct. And that is the only fee they have at this time. There is no fee discussed in the agreement whatsoever.

There's a liability.

Yes. Oh, okay. The confusing part to me was it says agreement length August 18, 2026 to August 30, 2030. So that's the part that confused me.

Oh, versus the annual pass. All right. Okay. I apologize. Yeah. And the annual pass is from the date of purchase. So if they were to purchase the pass today, it would be good through August 18th of 2027. Just FYI. Another point of interest for you.

Still confuses me, so. You're okay. Calendaring, I usually get. No worries.

Yes, Council Member Marshall.

Thank you. And at least I appreciate you bringing this up and looking out for the city's liability. I am fully in support of having the agreement in place. I am not in support of the fee as it's currently at. I, I agree with 163 a month as opposed to a year. You said that they, they use it approximately a hundred times.

Yeah.

So even if we were to do the $163.50 per month, you're talking $19 per haul out, $19.62. I don't think that's an unreasonable fee for the usage. And so I personally fully support having the agreement, not the price as it's presented. So thank you.

Okay.

Anybody? Yes, Council Member Romero.

Yes, I would echo what Council Member Marshall says without any further comment. Thank you.

Tim, do you mind to put my motion back up in case they want to make it?

Yes, Council Member Stuckey.

I move to authorize the mayor to sign the Facility Use Agreement with Mariners Haven LLC.

OK, we have a motion as presented.

Second.

Seconded by Council Member Arms. Is there any further discussion before I call for a vote? Yes, Council Member Marshall.

So just to be clear, this is the agreement. And so you will negotiate the fee with them then at this point?

So at this point, we do not have any other mechanism for the fee. But that is something that is changing pending the master fee schedule update.

But if we enter into this agreement now, they're getting that $163.50 for an entire year.

for however long, I guess that would be the case at this point, unless when the master fee schedule changes in January.

Not if they're under contract for a year.

I mean, if the fee currently says in the master fee schedule it's for the year, we have to abide by what it says. Okay. But when we bring the master fee schedule revision to the council in the next few months and we revise it per the council's input to make it per month, then when that renews, it'll go on that amount per month. Okay.

Hold on. Are you done? I don't want to call on him. I know you're done. He's thinking.

I'm certainly not going to approve the motion personally at 163.50 for the entire year. I think this is... This is the whole Yacht Club thing all over again, in my opinion. And we need to generate revenue for the marina. This money goes into the marina fund, correct? Yes, it does. Yeah, we cannot continue to keep doing. If we want to make the improvements that the MAC committee is looking at doing and that you're looking at doing, we have to have a funding mechanism. And continuing to offer really low rates for things is not going to get us to where we need to be. And so I love the idea that we have an agreement, but I absolutely cannot support it for 163.50 a year.

Okay.

Council Member Arms.

You know, and I do understand, Councilor Marshall, but the problem is we have to have something now. It's unfortunate. It's a very unfortunate thing. We have no agreement. We are lucky we weren't into an issue. We are into still a busy season. If something happens, we're on the hook. Yes, we're going to lose money temporarily. We've already lost money probably temporarily. But if we have an event, we are stuck. And so this is an unpleasant thing. But once we get the master fee, we get it the next year, which we're almost up to anyway or whatever, we need to get it done because if something happens, then we're on the hook now. We can dance with it forever we want, but it's not going to work. Well, we were going to do that. No, I'm sorry. We've already messed up long enough with it. I think it just needs to be settled. We'll fix it, and then maybe we'll increase it even more. But if we don't take care of it now and we have an accident, it is us. We're on the dime. And so I know it's not a good solution. I don't like it any better than you. But I think it's a prudent thing to do right now because this has been going on for way too long. And we're lucky that nothing else happened. So that's the only reason why I'm agreeing to the motion is for that very reason. Because we can't wait. We're going to say what, and then something happens that could be even worse. So that's the only reason why I want the motion now. I don't really like it, but if we get stuck hovering this around for another three months and something happens, we're right still in the boating season. We're still in that busy season. So I think we're stuck between a rock and a hard spot. That's how I feel. Thank you.

Mayor Pro Tem.

Thank you, Mayor. I agree all around, basically. I currently agree with Barbara in terms of the emotion that's on the floor.

I think that too little money is still more than zero money.

I wholeheartedly agree with Councilmember Marshall's assessment of the overall fee structure, but I'm okay with looking at that in October if we're planning to do that anyway, especially if we're going to be making major changes to something without a significant amount of notice or anything. So I'm okay with approving tonight's motion just for the sake of necessity and then reviewing that fee along with the Master Fee Schedule when we review all of that because I agree that the current rate is kind of ridiculous. For that reason, I will be voting in favor of tonight's motion and very much looking forward to having a more detailed discussion a couple meetings from now. Thanks.

Thank you, Mayor Pro Tem. Council Member Romero.

So, Elise, how long has Mariners Haven been paying at this rate for?

since the launch ramp was a fee for use area. Which? About six years now, I believe. I believe that happened around COVID was when the Marine Advisory Commission was looking for revenue sources and implemented the recreational and commercial fees.

So I agree with Councilmember Marshall with regard to the principle of going to a monthly, but I'm also mindful of the fact that we're dealing with citizens who are basing their funding and their finances on the existing arrangement. And going from basically token money per month or an annual rate of token money per month to $163.50 would be quite a sticker shock. And I think... I think there's wisdom in, you know, people are willing to jump at price reductions, but when they get a jump of how many, 100% or whatever it is, that's kind of a shock. So I would favor going with it as it is and then moving it up for the coming year. That's all I have, Mayor. Thank you.

Great. Yes, Council Member Peterson.

So does Mariner's Haven... charge the boats they haul out? Yes, ma'am. How much do they charge them?

I'm going to say, and this is an estimate based on what I hear around the dock, about $250 to $300.

Per haul out. And so they haul out about how many a month?

Depends on the month. I will be honest. It's really difficult to say a just month average because it's very seasonal. In a busy month, you're looking at, probably 30-ish between haul out and putting back in. Slow months could only be one or two.

And $19 divided by 300, this is me, $19, which would be what Council Member Marshall brought up would be the charge per haul out, divided by $300 equals 6.3%, in case you were wondering.

Thank you, I do appreciate that. So here's my question again. Under the terms and termination, it says this agreement begins on mutual extension or execution and end on August 1st, 2030 unless earlier terminated. I agree with Council Member Marshall about how little we charge for the things that are in our marina. I don't like $163 a year at all, and I can't vote yes for that. I'm wondering if we couldn't change the term on this agreement to August of 2027. And that will be in time to go through everything else. It gives us what we need in terms of protection. It allows these guys to do something different. I'd like to charge them $163 a month now. I don't think that's too much.

If we would like to change the terms. So I'm kind of. thank you would you prefer to change it January 1 when the master fee schedule would go into place so that you could start the monthly rate if that's what you so approve that works for me too so it's a four month I'm thinking outside of the box I appreciate that everyone at where we are councilmember Marshall

So to that point, have they already then paid for 2026? They've paid the 16, so they've not paid for 2026.

I was holding off to make sure that we actually got a facility agreement in place before charging them so that I wouldn't be charging someone that may not actually be able to use the facility. Their contract from last year just ended. I see. At the end of July. Yes. I'm sorry.

Well, not contract.

Sorry, for me, an annual ramp pass is considered a contract because it is greater than 29 days.

So if they pay the annual fee, Let's say they sign this four-month agreement to pay the annual fee. Can we prorate it?

No, I think what she's proposing is that this would only go through August 18th through December 31st. And then this would come back before the council again to determine what they're going to set in the master fee schedule. And then we would negotiate a new contract with that rate.

They would still have to pay the annual fee either for one full year or for the remainder of this year.

I'm just wondering, though, if they pay an annual fee, like next week, are they locked in? We could prorate it. We could prorate it.

I mean, we can prorate voting contracts. I don't see why we couldn't prorate an annual rate pass.

In that case, if we can prorate it for four months and then the new fee kicks in. I'd 100% go for that, yeah.

I'd be happy with that as well.

I'm on board with that, too.

That would be fun. Just to cover a temporary plan.

Okay, so I don't even know what you're going to do about that.

We have to amend the motion?

You have to deal with the motion you have. You have a motion on the floor.

You have a motion and it was seconded. So we have to vote on it. Yeah, so does everyone have their say? They're good? We can take a vote. All right, all in favor, raise your right hand or left hand or any hand. One, one, four, and then all against or opposed. One, two, are you, what are you doing? Are you raising your hand? One, two, three. Okay, so we have one, four, and six against, so it does not pass. Yeah.

So I'm moved to authorize the mayor to sign a facility use agreement with Mariners Haven LLC through the end of 2026 with a prorated annual fee.

Okay, so we have a new motion to authorize the mayor to sign an agreement with Mariners Haven LLC through December 31, 2026 at a prorated rate, seconded by Councilmember Peterson. Is there any further discussion before I call for a vote? All right, all in favor, raise your hand. We pass unanimously, thank you very much. All right, good job, Elise.

All right.

All right, there being no further business, is there a motion to adjourn? So moved.

Second.

All right, all in favor? We are adjourned at 7.09.