City Council - workshop

Thank you, Brad. For those who are not in the room, Brad just took the clock off the wall because time does not exist here today. On Tuesday, August 25th, 2026, welcome to City Council Work Session. I see Councilmember Caffey, Councilmember Jefferson, Councilmember Agave, lovely to see your faces virtually. I see Councilmember Sullivan, Mayor-President Von Holtz, Councilmember Swarthout, Councilmember We have our city administrator, Paul Simmons, myself, serving as Mayor Leanna Dodd. We have our city attorney, Karen Kirkpatrick. We have Melody, we have Lance, we have Chief Keelans, and we have a special guest, which ties us into number three. Oh, we also have Sharon Brown. That's our roll call. Item number three, Washington City's Insurance Authority Training Council Best Practices. Karen Kirkpatrick, who do we have with us tonight?

I'm happy to introduce Ann Bennett, who's with us tonight from WCIA and to provide us some great training. Some of you have attended similar training in the past, but I believe you'll be giving us some background on WCIA as well as potential areas of liability exposure for council members and best practices to avoid those. So take it away.

Well, thank you very much for having me. As Karen mentioned, I'm Anne Bennett. I'm the Executive Director of WCIA.

I just passed 30 years with WCIA. So, yeah, in July.

So, I can't believe it. I can't believe it went by that fast. So, this training, I always appreciate it when it's interactive. So, please feel free to ask questions. And, in fact, the last one I did, I had council members kind of challenging is strong, but just saying, well, what about this? What about that? Those are great trainings. So feel free. I'm happy to answer. And sometimes I may defer to Karen if it's an issue that I'm going to say, I'm going to defer to your city attorney on that. But I am happy to report that Tumwater has been a member of WCIA since 1985. So we are a municipal risk sharing pool So basically, we were created in 1981, and it was when cities could not get insurance. And so nine cities pooled together money and created us. We're actually a public entity. We're overseen by the state risk manager's office. And we act like insurance, but we're not an insurance company. We have over, now we're over 166 members, $222 million in assets. And that is all public funds. We're actually audited by the state auditor's office. What are the advantages for being in WCA? It is a member-run organization. Every single member has a delegate and a vote to our full board. Karen is the delegate for Tombwater. And all of the decisions on what we do, how we do it, is driven by the membership. So we not only provide that kind of insurance-like coverage, but we really, our mission is to assist members in loss prevention. Tumwater has a fantastic loss record. And I always kind of check when I come out. And you guys have done very, very well in controlling losses. And you do use a lot of our programs. You have stability in rates. Unlike your insurance carrier, where you submit an application, you're like, oh, I wonder why my rate went up. And they say, oh, well, cost clients. Ours is completely transparent. It's done by an outside actuary who looks at your losses. And it's got basically an overall, what do we need in terms of covering costs? We're a nonprofit. And then it's modified by your losses. And then from that, we use worker hours as an exposure. So it's how many workers do you have? And that's the exposure base that you use. The really good news is that all of the coverage decisions, they're made by me. And if you don't like my coverage decision, you can go to our board and appeal that. So again, unlike insurance where you're sending it off and wondering what happened, my mission is to find coverage rather than look for reasons to deny you coverage. So every single member has an assigned risk management rep. And we come out and do all kinds of best practices reviews, help with any questions that you guys have, and we do extensive training throughout. From the insurance standpoint, we insure your auto liability, your employment liability, your law enforcement liability, as well as your general liability, and that's the sidewalks, sewer backups, water main breaks, things like that. So you have $20 million per occurrence, and we insure the first $5 million per occurrence. So we have claims control the entire way. We use reinsurance up above that, and we have control of the claims, that whole layer, which is very unusual. Most don't have that type of . We work with our reinsurance partners, and they give us that. You also have additional insurance coverage through us, property auto, boiler machinery. crime fidelity, and cyber inclusion. We also do that, and we buy that from the agency. So I kind of want to give you a little bit of update as to why it is so important that you control liability at your level as well as throughout the city. So in the traditional insurance market, it's cyclical. There's hard markets and soft markets, and it used to always go like this. Year over year, oh, it's a hard market, which means it's hard to get coverage, the pricing's high, or it's a soft market, things got cheaper. And that was usually driven by losses. So Hurricane Sandy happened, hard market, then they start making profit, and then they can give relief, and it's a soft market. We have had a prolonged, what's called a prolonged hard market, and public entities are specifically problematic to insure. So for example, our rates for reinsurance for the last 10 years went up 700%. 700. Now WCIA's overall liability increase for 2026 and now for 2027 is 3%. And that's the value of pooling, is that you're not feeling those shocks that others who are individually insuring can get. I will say, that we are paying more money for less coverage. We used to self-insure the first $4 million. Now we have been pushed up to $5 million, and they'd like to push us. When I say they, I'm talking our reinsurers. They'd like us to take on more. So property, the first-party property market is crazy soft. It's cheap. And so what we've been doing during this cycle is buying more earthquake coverage, more flood coverage. So we're using the cheaper prices to increase the members' coverage. So why is it important? Here's some headlines, and I will tell you, these are actually outdated. There's been even higher headlines on these dollar amounts, and these used to be shocking, but I can tell you that they've only gone up from there. Recently, there was a $30 million verdict against the city of Seattle on the CHOP case, I think you guys remember. There has been cases against the state in the hundreds of millions. Cle Elum, actually, that $22 million on breaching a development agreement, they're actually currently going through bankruptcy. Yes, they're going through bankruptcy on that. So what's going on here and why is this happening? This is a nationwide issue. There's a proliferation of what's called nuclear verdicts, and that is any verdict over $10 million. And what's happening is you know, when you look at the states, it was used to be a West Coast problem. It's moving across the nation. Per capita, Washington is number three. And I can tell you that Florida and Georgia have undergone massive tort reform. And I know with you guys down here, you're very aware of their tort reform discussions going on. And we are actively involved. We're working with AWC, the Association of Counties. I'm talking to representatives about you know, this is a problem for public entities. And we need to come up with real solutions. And so we're going to work on that quite a bit this session. We've had some, I would say, productive discussions. The state is $1 billion, with a B, in debt in their self-insurance fund because of lawsuits. So it is bad out there. And I'm glad that we're finally having some conversations about tourism. So the important thing is how can you, as council members, avoid creating liability for your organization? And what I'll tell you is here's some good news. As a legislator, you receive an absolute immunity while you are undertaking legislative action. So when you're adopting budgets, ordinances, resolutions, when you're a body as a whole, you as an individual absolute immunity now we're going to in the future kind of talk about a few areas where you can get sued individually for your actions but in general when you're legislating you have an absolute immunity when I first started at WCA this didn't exist and I see it lawsuits all the time that named council members individually and then a case came down and said no no they're legislating they should have absolute immunity so but again remember it's Not acting as an individual outside the council as a whole when you're legislating.

I just have a question. I'm no longer on council now. I'm serving as mayor and the executive, right?

And I just got to go back to our most recent example.

And then when documentation was changed and mining was put on it to be sued about the Davis Meeker Gary Oak tree, so council couldn't get sued, but the mayor got sued. But if the council had made a decision, then they couldn't have gotten sued? Individually. Individually.

I think the litigation you're referring to, you actually were sued in your official capacity. Right. But, right, and that's a good, but it's a good, that while you're protected as an individual, that doesn't mean if the council took a, you know, knowingly took some sort of illegal action, the entity the city could use.

Does that make sense to you? So here's an area where Tumwater has done a great thing, which we advocate for, is the use of hearing examiners. That actually means you have less issues with the appearance of fairness doctrine, which is the doctrine that says you must be fair and impartial when hearing land use appeals So that, you know, it has been problematic in the past when councils have undertaken that, and that's because you want to talk to your constituents, you want to get opinions, and then that means it's problematic for you to sit as a judge being fair and impartial. So it also eliminates all those arbitrary and capricious allegations against your decisions as a council. So having a hearing examiner is a big, big That doesn't mean, as a council, you can't still create liability for the city. And so I'm going to talk about two cases. The first one, Westmark versus Burien, was one of ours. The city of Burien incorporated back in 1993. And part of the reason they incorporated is they didn't like the development that was going on under King County. And mostly they wanted more single-family homes, less apartments. And this is a long time. And the land use laws have completely changed since this decision. So really, a lot of this delay couldn't happen. But this whole case was delayed, delayed, delayed, delayed on both sides. And what happened is during that period where this project was being reviewed, the council was constantly saying, how can we stop this development? We don't like apartments. This is why we incorporated. We don't want this. We don't like this. And so as this case progressed, at one point there was a mediation and there was a south. And WTIA agreed to pay $200,000 and the city council was going to approve this development with certain caveats. So what happened is that we went forward Settlement agreement signed. Everything's good to go. And then as the development started to move forward, the council said, well, you know what? We didn't approve that in open session. So we can take it back. And they did. And so they said, we're not going to follow through. It wasn't approved in open session. It's illegal. Therefore, sorry, we're not going to continue with this process. So then they sued for know breach a contract trying to enforce it well actually the council was right there was no contract because it wasn't an open session so then it was reopened and off to the races again so this case ended up going to trial and when it went to trial the case that was presented while we were saying well you know they there were environmental impacts they didn't do their part they didn't you know uphold This or that part of their end of the bargain. The entire time the jury heard that the counsel didn't want it. Here's what the counsel said. Here's what. And so that jury, and this is, I mean, in 2008, awarded $10 million. Yes. And so that was a bit shocking. That was very shocking. So what happens when you get a verdict for $10 million, you think? I'm going to appeal it. How many appeals? That's outrageous. Now, not so much. But then, this is outrageous. The Court of Appeals excoriated the city and said there was a tortious interference. They interfered with this business. It was intentional. They knew what they were doing. And this developer was wrong. And so they upheld the verdict. And that's when we said, we need to start training on this because hurts matter. And they will be used against you.

And so, as I'm saying this, I'm just thinking, as an elected and on council, you serve as a delegate and a trustee, right? On certain issues, you are representing a voice and you're voting that way. In other ways, they're entrusting you to vote for the betterment of Tumwater, right? And so, when you're out and people are asking you and you're giving your personal opinion, well, I don't like that. I don't want that in Tumwater. This is why I'm concerned about that, right? Because you have your personal opinion, but when you're serving on council, everyone's paying attention, right? So there's been some examples. I think you can all think of some current examples where you might like it or not like it and how you've been framing that in the community to put us at liability.

And I think to add to that, you know, we have a very vocal community about strong opinions. at the end of the day, help me out if I'm wrong. Council's job isn't to like or not like a particular development. It's to determine, does this development meet the requirements of what's allowed in this space? And so we just have to, and the public usually doesn't understand that. They think the council has a lot more control than you can have. There's always a communication and educational exercise that we need to do, but just being aware of that. We can you know, your role isn't to like or not like, it's to approve or not.

I mean, I go back to Councilmember Cathy, right, to model how she puts everything back to our strategic goals and priorities, the elements in the comprehensive plan. Everything that Joan talks about and hears about, she frames it back to what we are unified in doing it, right? So whether she likes something or not, Joan is always framing it back to the urban forestry plan. That's why she's been so passionate about that, because what we currently have is not what we're trying to go. So she's been really pushing that so it aligns. So if we can circle back to Joan Cathy and model that of what you're saying to link it back to the stuff that you all have been working on, then you're safer. I see John shaking her head. Yes. Yes.

Thank you, Anne. Another case is a good example, and I call this the Listen to Your City Commission Springs versus City of Spokane. This involved a big development that was going through the process, was fully vested, and the community was very much against this project and was voicing that. The mayor then decided that he would invite all of the people who were against the project to a council meeting, then said in open session, I want to know the status of this project, who's the development director. The development director said, it is proceeding with grading permits. They will be breaking ground this week. And the mayor said, I do not want you to issue those grading permits. You need to stop. this development. So for whatever reason, Karen I know would say, hold on, we need to have an executive session, let's go. And she would go into executive session and she would explain the legal reasons why you don't want to do that. For whatever reason, that escapes me, nobody's ever explained it to me. The city attorney went on the record and said, you know, Mr. Mayor, you cannot do this. It is illegal for you to stop this. They're fully vested. The time is over. You cannot stop this project. And the mayor said, I don't care. These people want this stopped. Stop the project. Don't issue the permit. So what do you think happened? Mission Springs sued. And they said, uh-uh, fully vested. You don't get to do this. And what happened in the case is because it was on the record from the city attorney saying, if you do this, you're bringing a law. The court found that the city, the mayors, had violated both federal and state law by what they did and the delay. Now, because the decision came down as intentionally violated, there was no coverage. Their insurance carrier said, that was no accident. You knew you were breaking the law. So to this day, I don't know who paid for it. I know there was big money. And there was all kinds of other litigation after the fact. But that case is one that when you are given legal advice, you want to listen to that legal advice. And again, know that your city attorney is going to say, we need to go on executive session. We need to discuss this so that you're aware of the risk that you're creating for this. I don't know, Karen, did you ever find out who paid that?

To this day, I don't know.

Yes, I'm guessing the cities themselves did. I just want to mention a little bit about development agreements, and this kind of comes on the heels of the Cle Elum arbitration decision. Development agreements are contracts, and so contracts are not covered by insurance because it is a contract, and if you breach a contract, it's not an accident. It's not looked upon under tort law. It's looked upon... under contract law. So I just, there is nothing wrong with development agreements, but I just want you to be aware of that. There are times when you might have a long-term development agreement and, you know, you should know that you are binding a future council to those decisions. And sometimes that can be somewhat problematic, but it is a contract. And if you are inheriting a development agreement, that is something that you have already bargained for. And so a prior council has already made that contract, and breaching it comes with probably no coverage for me, as well as liability for the city.

The other thing I will say... Just a little disclosure, there's three development agreements currently under discussion for consideration that are coming forth to council in the next six months' time frame. So there's a series of developments.

And they're a good way of, you know, deciding the rules for both parties. So I'm not anti them. It's just more I want to explain to you that, you know, when you go that route.

Your city attorney is a little more skeptical. But, yeah.

So I will say one of our members had a case where there was a development agreement that was in play for a long time. All of their code changed. And the current council was very much against this development agreement. And so there was, I think what the court said, the city slow played working that and then, oh, it expired. Oh, now you got to use the new rules. And the court said, no, not really. Yeah, it expired, but you city delayed too much. So that was an interesting take. And again, we weren't involved, but I am aware of it that Is it really an expiration date? And the court said, you don't get to play gotcha and ruled against the city on that one. All right, personnel. This is an area where I say, you want to make sure you're staying within your role as a council member. You want to stay in your legislative role. It's adopting policies. It's setting budgets. You do not want to stray into the mayor's rule. That is discipline, hiring, firing. Anytime I have seen a council member stray into that area, nothing good comes of it. Mainly because personnel law is very complex. There are all kinds of laws to protect employees. And you don't want to get involved and have confusion with the employee and or the city itself. So what we always say is you want to leave all of that up to the mayor. If you're aware of an issue, please report it to Paul and the mayor so that, hey, there's an issue going on, it's been brought to my attention, and I've advised the employee that I'm going to notify the mayor and or Paul.

Anne and Karen, because we recently did a change regarding approval of contracts, right? We added the police chief. Could you both talk about what it is? When we say hiring and firing, but then sometimes we're presenting a contract to council, sometimes there's confusion.

So I believe what you're referring to is that under our city code, although the mayor makes an appointment of the directors, there are some positions that require confirmation by the council. And so those positions and if we're approving a director contract, at least in the past, the contracts would come to council. So the finance director, the city administrator, the city attorney, and the police chief require confirmation by the council for that appointment. However, that firing decision would not require .

So what I will also mention is we have a program. We call it our pre-defense review. that we offer legal advice because personal is always changing and very complex, where our members can call and get a consultation with a personnel attorney, and we walk through the entire process. And sometimes we're saying, no, you know, you can't, or hey, how can we help you? Here's the next step. One area where we're getting a lot of phone calls is harassment discrimination. And I really don't know what happened during the pandemic, but when people came back to work, We don't know how to work well together. And it's very, very disturbing to me how what I'm seeing out there. I mean, it really is. And so what I will say is remember that you are all held to the city's harassment and discrimination policy. So you should know what that is. I personally, I look at it as you don't have to know all of the intricacies of the law. Treat people how you would want to be treated. And I think the better is treat people how they want to be treated. And you probably aren't going to get yourself into trouble. But I think everyone knows what's appropriate and what's not. And that's what's shocking me here is I think this is knowing behavior and a, yeah, that's for other people, not me. And so we are getting a lot of complaints. This is an area where you can be sued individually if you are choosing to harass an employee. And, you know, it doesn't matter whether it's within your role as a council person. You could be sued individually for harassing or discriminating against an employee.

Peter, you have your hand up.

Yes. I think municipal code needs to be set aside from executive rule. Oh, I'm sorry. Isn't that legislative rule? I got you. Daydreaming. Don't mind me.

Nice to hear your voice, Peter. Carry on. Thank you, Peter. Anything else from Campbell? Eileen?

Oh, harassment piece of it. Yeah, it's just like, not so much like, not this, but directed at elected officials and their staff and stuff. And so, you know, like, Lieutenant Governor Peck has a whole thing about civility, this whole program now and stuff like that, because Starting, yeah, with COVID and, you know, when you just use whatever language you want. And I used to work at the legislature and we became, yeah, just targets. And the filth and the stuff that people would send to us and the stuff that was on the phone and everything. It's just, so how do we get protected?

Well, I mean, unfortunately, and what I'm talking about in liability is what we call, I mean, there is harassment and then there's illegal harassment. And it's defined, and unfortunately, a lot of what's going on against you is probably not illegal from a liability standpoint. What I will say is there are areas where, and we're going to get into this a little bit later, but there are areas where a staff person probably has some rights depending on how things are phrased with them. So if it's... I don't like the job she's doing because she's a woman and she's too emotional. That's illegal. And that's not okay. So there's a little bit of nuance there for, you know, and as an employee, we're protected from that. So, but unfortunately, this is an area which I agree with you, it's gotten out of control on elected officials. And I don't have an easy answer for you. I really don't. I think the civility initiatives that are going on are great, and I'm hoping those continue. I really do. Again, this area also has come up in elections where there was a mayor who was touching female employees inappropriately. And so the idea was that at that point, the city manager said, I am restricting you from any part of City Hall. You cannot interact with my staff. We're going to send you through some training and that happened. And then elections came and guess who campaigned against them? The women who had been touched and they had signed, they went to the, you know, the meetings and said, I, this is not okay. And so again, I mean, he should have known that. But be aware it has long-term ramifications for you as well. Negligent misrepresentation, this is, we'll kind of go through an example here, but this is where we ask that you don't make specific promises and assurances to people. And that's because of this thing called negligent misrepresentation. So what this, I'll give you an example first and we'll kind of walk through it. So back many years ago, one of our cities has a downtown that has cute, you know, it's all cedar shingles. And so this town's code said, if you take down Cedar Shingle, you have to put up Cedar Shingle on your business. So a business owner went into City Hall, met with the mayor and said, look, I can't afford that. I'm going to have to shut down unless you waive that. And the mayor said, well, you know what? We love your business. I'll go ahead and waive that. Well, unfortunately, he never told the code enforcement officer that he was waiving it and he didn't have the authority to waive it. It's code. And so this business owner tore down all of their shingle and put up other sightings. And so what happened was he filed a claim for negligent misrepresentation. There was a specific promise. There was an assurance that you could do it, and he relied on it, and it damaged him. And so we, WCIA, paid for the replacement of taking down all of the stuff he had put up and the cost of that. So that's negligent misrepresentation. If you make a promise and somebody relies on it and they're damaged because of it and you were wrong, that could create liability. So what I always say is refer questions to staff. These are your experts. Staff are the experts here. You can always say, I don't know, but I know where you can get the answer. It's here. You also don't want to take matters into your own hands. I've had situations back in the day with like a sewer backup where, I mean, trust me, it's a horrible thing that when it happens and I've had council members say, don't worry, we will take care of everything. Just make a list. We'll pay for it all. And that sounds really nice until you realize that it was caused by a contractor putting concrete down the manhole and they're responsible. But the citizen said, I was told that you would take care of it all. Yep. And I relied on that and I hired all these people and now I've got to fight with the contractors? Not okay. So again, I always say, I don't know, but I know where I can get you an answer. And that's the safest thing to do. Defamation. And this is an area that if you are legislating and you are having a healthy debate, that's what you're here for. You are here to have debate. But you need to be careful when you're speaking about individuals. That can give rise to liability if there is any untruth. So there are times when you can talk about public officials. There's kind of a higher bar if you're a public official, and this kind of gets to what we're talking about, is there is no defamation when you're talking about high-level public officials. So even I would probably be considered a high-level public official as an executive director. But it's still not a good practice. And especially staff or any other private individual, that could give rise to liability. So what I would say is that, again, most of the time, especially if you have an issue where you're going to talk about performance of an employee, you want to do that in executive session. That's what it's there for. So often this will come up with contracts for, you know, the city administrators, a good one, where you're going to have those conversations in executive session so that you don't create an avenue for defamation. And the one lawsuit I had from that was actually a city administrator And a council member continuously called that person a liar and said, they lie. I challenge you. You're lying. You're not telling the truth and did it repeatedly. The city administrator left employment. And then the council member took it upon themselves to contact the new employer and say, I can't believe you hired this person. They're a liar. They will lie to your face. They will misrepresent. They will. And so, What happened is there was a lawsuit that said, this whole time, yes, as a high-end city official, yes, I am protected under that idea that they can say these things. However, it went next level after I left. And WCIA said, that's not in the course and scope of your duties as a council member. And that council member had no coverage through us because we said, you went too far. And that was with the city's agreed. And said, no, we shouldn't have to defend that. That was 100% him as an individual, not as a council member. And so that's where the lawsuit gave rise to liability. So again, treat others as you'd like to be treated. Would you like those kind of things being said about you in a public meeting? Probably not.

Yeah, it's one of the reasons our council rules for public comments say to speak to the council as a whole and not individually. And the same goes with council during debate. Speak to the issues. It doesn't have to be personal and individual things.

And I will say a lot of times when I do this training, people will say, but what about campaigns? Believe it or not, there is a decision, a court decision that says you can defame your opponents. not it's not illegal for you to defame someone when you're um but it would be illegal to do it in city hall in these chambers so right right but i remember like what where are we at that we have a court decision that says you can defame your opponent i mean again i'll stop So the next area I want to talk to you about, and this is kind of becoming a hot topic and what we're advocating for with the legislature. So I have this term here, political engineering, but I want to walk you through why this is so important. So in the state of Washington, we have something called joint and several liability, and this is what we're asking to reform. So joint and several liability says if two parties are sued, And the plaintiff is fault-free if there is at least 1% of fault attributed to a party, they are responsible for the entire amount of damages awarded. So, for example, you could have a case where the city is maybe 10% at fault and another party is 90% at fault. The plaintiff can collect the entire amount from the city even though they're only 10% at fault. So what this has led to is what is called deep pocket liability. And so what we have seen is often this is used in road design cases. And so you have a horrific injury and the at fault party doesn't have insurance or not enough insurance. They will then look to another party, a deep pocket, to see if they can get at least 1% of liability assigned to that entity so that they can collect the entire amount. So this means a lot of these cases get brought frequently because there's not enough insurance to cover the injuries. So these become engineering, what we call engineering malpractice cases. And it's extremely important that when you're defending the decision of a crosswalk, of a road, of any type of traffic treatment, that it be done with engineers using engineering guidance. And because you're going to have to be able to say this decision was because of X, Y, Z, and this is the engineering behind it. When in the past we would find what we call political engineering, where council will say, I really want a crosswalk here. People are jaywalking. We need a crosswalk. Well, that can be a very dangerous proposition. They're not force fields. They need to be engineered. And a mid-block crosswalk is one of the most dangerous things you can install. And so they have to be engineered, and there needs to be appropriate treatments for signage. Sometimes you need lights. Sometimes you need full stopping. So that's why you want to make sure that you are following your traffic engineering advice and that they are making that decision.

And bringing this up, we are getting a lot of these concerns, right? And so when I have been going out, I take, Brandon Hicks comes out, and so we have those black boxes. So when we hear a concern, we also have our traffic team that you can send constituents to, right?

It's a whole team with multiple departments that research. They go out, they track the data, at least like 10,000

trips, right? And they figure all of that and they'll explain all that stuff. So that's why anything that comes in, we have the traffic team, traffic team, traffic team, traffic team, right? But your job as an ambassador is to hear all that and then connect them to the right piece and then let them do their thing.

And, you know, that's exactly, let staff respond to these complaints.

That's what we heard.

Yep. And you want to avoid inflammatory types of statements. I was at a council meeting many years ago And I heard on the record how many people have to die before we put a crosswalk in. Yeah. And so, you know, especially from the council, you don't want to have those statements. I will also say sometimes you will have a horrific accident occur in your city and you want to resist the temptation to immediately address and or fix that problem. It is horrific. It's horrible. But you can really create liability. We've had situations where You know, the driver said, I just never saw the kid in the crosswalk, so the sunlight was in my eyes. But afterwards, the counsel said, oh, that was an accident waiting to happen. There was speeding all down that road. I knew someday somebody would be killed. They were called by the plaintiff as a witness at trial.

That is an example we have experienced with a couple incidents, blaming it on one thing, and then that's why we have Dr. Bowers and police who researched it, and it was not true. what this stereotype was. It was this anomaly and something else happened that had nothing to do, right? So, we have two recent examples of that where it wasn't speeding, it wasn't because of location, it was because of some other factor.

And so, just keep that in mind as these come up. It sounds like you've got a great, you know, way to address all of this. That, you know, isn't always the case. So I very much appreciate that, that you guys are doing that ahead of time. Any questions on that one? And watch the legislative tort committee forward. Joint and several liability. We're asking them for, we have several asks for it. So we're trying to get that one through. I don't think it'll happen this year, but we'll keep having the conversation.

We can put it on our lobbyist list track for council.

Yeah.

It was legislation in the past, right? Last session, right?

They were trying, but it didn't get very far. And so AWC, myself, the Association of Counties, we're all kind of trying to bring this forward. And we have a whole bunch of apps that could help solve this problem. So this has always been a discussion. It really has not gained traction, but we're going to keep trying. So we'll see. We'll see what happens. This is an area where I'm going to ask you to resist the temptation to share. Please do not leak executive session information. Executive session exists for a reason, because you're having conversations that if they were out in the public, it would be a detriment to the city. So I always equate it to you're buying a house. You know, you're buying a house. and you wanna talk to your significant other about what's our top dollar? Where do we wanna go? What's our maximum? What are we thinking? And you're having those discussions on your home in the privacy of whatever conversation you're having. If you had that in the public domain, what is the seller gonna do? I'll take your top number. And this has happened. I had a case where I went into a mediation And I, you know, mediations are, you know, you're making offers, you're receiving offers. And finally, at one point I said, well, that's my top dollar. That's where I'm at. And it was where I was at for that day. And the mediator came back and said, you know what? They know what authority you have because the council asked and the city attorney said she got authority up to this amount. Now that doesn't mean, just because I have the authority doesn't mean that's my dollar. I was just, I had authority to go that high, but I wasn't going to do that. And I was stunned because now they'll never accept anything less than that number. So we then said to that council, we're done. We are not going to communicate what's going on in cases. We're not going to give statuses because we can't trust that that won't be legal. So just know that is our penalty. When we know that there's leaks, I've had situations where my whole defense plan somehow ended up on the front page of a newspaper. And I know that came from a council member. And I, again, if you are in executive session and you're given material, always give it back. There was a case that one of our attorneys handed out some information during an executive session, giving out legal advice and somehow missed one of the pieces of paper. They came out, they all were on the dais, and one of the council members got up and walked over to the attorney for the citizens group and said, here you go. And I have never seen a city attorney move so fast in my life, just leapt across, started, you know, this is, you know, we did not waive privilege, and they're kind of arguing over this piece of paper, and she quickly turned to every council member and said, did you waive privilege, did you waive privilege, did you waive privilege, because the You can't waive privilege individually. The counsel as a whole has that attorney-client privilege and luckily was able to get that handled immediately and said, you know, that is a privilege document. Nobody here waived privilege.

Yeah, don't do that.

And then what ended up happening is the counsel sanctioned that counsel member for doing that. And so again, it is possible that you could have sanctions and it happened in that area. So just be aware. As always, be mindful of your written communications. You want to make sure you're using the city email. That is for public records. It must be retained. The city needs to be able to produce any of the emails you have written on behalf of the city when you're working in your role as a council member. So you want to make sure you're using your city email address, not your personal address. It is discoverable in litigation. So think about, I mean, once again, words matter. So think about if that email was produced, what would you, how would you feel about that being on the front page of the newspaper? That's the best.

We just updated your council rules, right? With, you know, Peter, I had a great question this time. What is in a timely manner, right? When Tracy and Melody are reaching out to you and Brittany- Do you have anything on your personal device? Do you have anything on your email, phone, all that? So when they're asking, it's because they're really asking. So we talked about what's a timely manner to respond back because you don't know behind the scenes of who's requesting what. So you have to make sure that you have the capacity to give everything that you have. Peter, I see. Peter, you were unmuted.

No, I was just shaking my head yes.

I'll take it, Peter. I'll take it. But that's why we want to make sure that we connect with you and you, right? That's why we have your text messages, your city cell phones. That's why you have those because the staff can pull that. They can pull your email. But if you're doing something on your personal email or your personal phone or your social media, you have to share that as well if it's related to that topic. That's why we want you to keep everything separate. That's why I have three phones. Everything is separate.

I do the same. I have two phones. They're all separate. I don't do any of my WCI business. on my personal computer or my personal phone. Then you don't have to worry about it. Then I know there's nothing there and it's all being housed within our servers for my public records officer to search. Also, just a brief thing on social media. Remember, is it a personal account? Is it a city account? Or is it an election account? And I will tell you, AWC does a fantastic training on social media. So if you can, you want to do that training. My involvement in this is really more on the First Amendment side of things. So if you want detail, definitely go through AWC on that. The real question is, if you have a city email account, you can do something which is called opening a public forum. So a public forum is where you have discussions back and forth with the public. And when you open a public forum, with the exception of certain areas, you cannot block or stop that dialogue. So you have to be very careful. I mean, there has to be certain exceptions met. And so we had a case where a mayor opened a public forum and sorry, that's not, I'm not, I'm not, not disparaging mayors here, but he had his personal account. He started talking city business and was like throwing out. How do you feel about that constituents?

What are you thinking on a personal page?

And so this then became, because he was asking city questions, city business, it became a city page for purposes of opening up a public forum. And then someone started posting on it and saying, and this person was a member of a hate group. And a lot of what was posted was not very nice. And he blocked that person. That person immediately filed a First Amendment lawsuit. Said, you opened a public forum. You don't get to shut me down because you don't like what I'm saying. And guess what? They were right. And we had to pay them. So just be aware of that aspect. That's the only aspect I'm kind of addressing here is that First Amendment often, and I don't know if you guys do, cities do have social media policies.

We do.

Yeah.

And then just the mayor has a social media. And then every other member would actually have a campaign page.

Yeah. And those are totally separate. Right. So there is there was a decision that came down on that that said and so there are some decisions out there that talk about how you're using it.

But I think that's been going back and forth if they want a page or not. So far, no one has one.

But our our city sites have a very robust policies, what?

I thought you said dialogue.

And their monitors. So that's really important. And then, you know, your campaign websites are on your own. So it's that middle ground I think where there's most exposure.

If you do want one, I just had to do it for the mayor's page, you have to staff has access, you have to vault it, right, because it's open to public information and PDRs, right, and then they go in and answer questions and stuff like that, so they have full access to it because it's all public information. So if you do want that, you're going to have to go through the city to do that, debit monitor, and everything is vaulted and captured, and then you can't block anything.

Well, that's not...

I'm not blocking anything.

It needs to be pertinent to the topic that was introduced on the discussion.

I have a question about email. It's just like a social norm. We don't respond typically to constituents, but I don't know if that's something that we've accepted as a whole or if that's part of council rules or... You can reply. My name's Lieta.

You can reply.

I feel uncomfortable. It depends on the topic. And that's, I mean, I think that's the reason. That kind of opens up.

Yeah, have a great day. I mean, I used to respond.

We're not having you answer, but you can reply by saying, got it, I forward it to staff, we'll circle back.

Yeah, because. Okay, but I just, okay.

Yeah, I'm not having you, I don't want you to answer the question.

I'm just thinking about like, and not our council, but like other councils.

We're not worried about other councils.

I'm just throwing it out there as a, saying that if there's anything as far as our liability when we're responding.

Yeah, that's why you always report them to staff because you don't want to answer an engineering question because you're not an engineer, but you're representing.

People will come in and I will then reply and go, got it, council has it, forward it to applicable staff. Right. They'll circle back with you. Yeah, yeah.

But what do you think? One particular comes from when you serve on a community. I'm thinking of the finance. Oh, so anyway.

Well, give an example without names because we're talking about liability here.

So as far as they serve on, you know, as a council member and then you serve on a committee and then going that far to even responding to constituents as a committee member, I don't, I mean, I just kind of feel like you're getting, yeah, we're getting like, Before you do that, you'd want to talk.

When you're serving representing the city on another committee. Yeah.

I think that the response is the same. Their staff assigned those committees and so that you can still refer people to staff if you're not comfortable with.

Well, if I wasn't letting the executive director, as that was their task to answer the question, probably. Yeah. They took the lead to do that.

Absolutely. Staff, in my opinion, experienced staff is always happy to answer those questions. I thought you were more asking for when the constituents outreach you to meet. I know I get a lot of questions about, can I meet with these folks?

Angela just got that request and she checked in.

I think a couple things. If you're on an intergovernmental for another government health agency. I think you can work with their staff, and you can also supplement that with our staff from someone or two if you're not satisfied with their staff and their staff's response. I think the other thing, too, is if a message comes in to the full council, I'll ask staff to share their response. You know, they'll respond to it, and then I'll say, make sure you share that with council. And I always try to add the caveat, like, if you need additional follow-up or have additional questions or if that didn't fully, if you didn't feel like the staff response fully hit the mark, then always follow back up with us so that we can then correct that message.

I think something that Eileen's referring to is we are on outside committees. And sometimes I think that electives forget that when they're on these outside boards or committees,

they're not representing themselves as these are my beliefs and these are my wants and my needs. I'm representing all of council.

And I think that that does become problematic, but yeah.

And that's it. It's just like, it hasn't happened before, but it's starting to etch up a little. And what was the norm that we didn't, you know, we don't respond, you know, that took care of it. Like,

you see that it's starting to we have that we don't do that we're seeing other versions i know too right because that came back because peter on one of his assignments came back and said yeah another jurisdiction saying that they can't represent and they can't vote right we all have the discussions no like you're voting representing the city and we're giving you like we're entrusting you to represent the city and vote right so but if you do have a question but that's why you come back and give your council assignments right we entrust peter on his committee to vote for us there, not like hold anything up and come back, right? But that's why you have the staff assigned. You have your assignment. It's a good example.

It is. So with that, I'm done. You guys were fantastic. Do you have any other questions for me?

Angela, Peter, any comments, thoughts, what you heard tonight? Anything come up for you? No.

Good presentation.

Good presentation. Yes, it was very good. I always think twice after briefings like this. Thank you. Thank you.

Megan Kelly, Eileen Brandon. And she's always available. So if you have questions.

And thank you. Yeah. And thank you so much for being a member of WCIA. We really appreciate it. Thank you. Thank you very much.

How is that going to go after that? Community Developed 2026. Your plan status update. Sharon and Brad. They're going to start with music now. Okay.

Acapella.

We have a consultant there as well that we're going to invite in virtually.

Yeah, he's a panelist. Oh, are we doing status updates first? What are we doing first? It's community. Community about work plan.

Thank you. Thank you for joining us on the table.

And Sharon, who do we have on the table?

Well we have a bad well, but I was told. We're doing we're going to work for so.

Yeah, and they're going to say how do you know we will wait until the next item.

The development has a council to work plan becoming you in December for a joint planning Commission Council work session to develop the 2027 work plan we came to you last number. And I wanted to come to you at the midpoint of the year to tell you how we're progressing, what's on track, what's slower, what's taking longer. So just to check in with you. And I'm just going to go line by line what is kind of the layout of the work plan in terms of what that was.

I did not mean to do that. You should be able to. OK.

The city, under the Growth Management Act, we are allowed to update the comprehensive plan once per year. And we had four comp plan related elements. In 2025, we updated most of the comp plan, but we had two elements that weren't part of that 2020 update. One was the parks plan, and one was the economic development plan. Parks plan was on this year's work plan, but it is going to be delayed. I believe they're applying for a grant application to get a consultant. are scheduled for adoption in December 2027. So that's not part of this year's work plan. Economic Development Plan is proceeding, and we hope to have that to you mid-December for Council adoption for Economic Plan. And then we have a joint plan with Thurston County. They're leading on that, and they haven't gotten going. So that will probably carry over 20% as well. There has been a UGA swap application. The applicant withdrew.

And that's what you think the area that he so they get to be a lot of patients that prompted. I read the city's part to look at the whole. We have a number of reasons to look at what could be expanded or attractive but we think it would be more to do that in a citywide level. We're preparing an RFP to issue this all and then we're going to be commencing work on that in next year. From that study we anticipate we'll have some changes to be a that will need to be on the county docket to address. But we'll go to that point.

They're going to work okay next up to the regulations or the code. that we had a state mandate code update for housing codes and we have anticipated we have an anticipated adoption date in January. Transportation impact fee is coming to you in January as well. We had a housekeeping ordinance that you adopted in April. And it was minor housekeeping things that you've already approved. The multifamily tax exemption code expired in December 2026. Eric Bagwell is our consultant evaluating that program. He's going to speak to that in a moment. What we're bringing to you for approval is just to extend that program by one year to give him time to do his study because you won't have his final results until early next year. And then you'll be able to make another round of code amendments to adapt the program. But for now, we're just going to move the deadline so it doesn't completely expire, just giving us another year to get the results of that. Thurston County code. They have a code title 22 that pertains to all of the area in the urban growth area. But this is the parts of the land that city will eventually annex. They are going to update their title 22. We're going to have an opportunity to review it, basically adopting all of our zones and regulations. But we haven't seen that yet. It's led by them. So there's been a delay there. And most of you joined us on the urban forestry management bus tour to see the sites. We are working very hard to and use some code early part of next year. But it's taking longer than we had stated. So longer than our stated date of February.

Karen, John has her hand up.

Yes, John.

There you are. Hello. Did you stay going? Can you say that again?

I have a question on the last one. The anticipated thing in February. Will this urban forestry management plan amendments have anything to do with changing our tree ordinance is that still part of doing.

Yes, it's the landscape code, the tree preservation and the street tree code. So

I've kind of lost where the tree code is, the one for anyone who does any kind of developing or scraping the trees off the earth, how many and what it costs and all of that. We've had this tree code that's quite old or buried along the way. And I'm wondering, is that included in this or is it a separate thing?

It is. It is included in the tree preservation code. This project was paused in 2023 and we resumed it this year.

Which leads into, Joan, I've reviewed the three versions. I mean, I've reviewed the three different entities and I was just asking. I submitted my comments, but I think council needs to see it.

Yeah, so Joan, this is a quick update of why we're still in progress working through this. Number one, it's been a three-year gap since we did the original work. There's been a change in administration. There's been new staff coming on to replace me. And I think, to be honest, there's a better direction going forward. And I want to pursue what is being done to make sure that we get the best code possible. And so that's why the work is still underway. we'll be providing updates as we move forward. But all the things that we've been talking about, all the concerns that were raised earlier are still valid and are still being considered as we're looking through this.

We also have a climate element that we didn't have in 2023. And so we're trying to align it with that, as well as water conservation goals. So we have a lot more to do than just pick it up and adopt it. And so it's more than we anticipated. And it's going to take a little time.

Joe, it's really, really good. I mean, a lot of this stuff, all your stuff is incorporated in some element that the gist of my edits were like placement, move the natural stuff up, move the stuff up and highlight it. It's really, really, really good. And I do think it's time to share some version iteration with them because it's going to take them time as well.

Yeah. As soon as we have a draft, we will.

Right.

Very good. I'm glad that, I'm glad what Brad said, it's, we're the only two that have stuck around so long that we know what it used to be.

I think also the very important thing is we've got some really good concepts. We've got good ideas, but it's also making sure that anybody understands when they look at the code, what they need to do and all those kinds of things. And that's where we're really putting in a lot of effort. So I'm hopeful we'll get a good product out of this better than the thousand words that I usually produce to get one.

Yeah. We also made a decision this year to move to a repeal and replace. That's sort of just going in surgically because what you saw was the surgical and there were a lot of issues there. It wasn't clear what the applicants were supposed to submit. It wasn't clear what the planners objective criteria were. And so we need to go to So we've changed direction. And so it's going to take a little more time to get what you want. So we're getting there.

Yeah. It's really, really good council. Like really.

Thank you for your patience.

We've been working a long time. So I'm glad that I'm glad.

Yeah. Thank you. Okay. Yeah. Thank you. Thank you, council member. Okay, these are additional regulations that weren't in our work plan, but we needed to attend to, and you've already approved two of them. One was a building demolition code update, and one was a parking lot lighting code update along the I-5 corridor. And then we came to you earlier this year, and you gave us approval to pursue getting code in front of you for the battery energy storage system, and we've been a little bit delayed getting that started because of our other projects, but that's slated for spring. It'll be on our work plan in 2027. And these other planning projects that aren't related to comp plan and code, we've had two annexations, one that you approved in March for 93rd Avenue and Case Road and one that's coming to you in October for Black Lake-Belmore. And then do you want to speak to the Brewery Redevelopment Plan Action EIS?

Yeah, so that process is now restarting. We now have a consultant that's going to be helping us with that. We've restarted the project, so that will be also something that we'll be working on. as part of the community development department in coordination with the other departments.

And the other line item is comprehensive plan monitoring scoping this is related to our replacement of the permit database.

So we're replacing our whole permit system and replacing the brand new one one very important component of that is reporting and monitoring for all of our comprehensive plan. things, we want to have an ability to say, yeah, we're actually doing what we said we wanted to do. So that's what we're discussing there.

Our system is just reaching end of life. And so we aren't

My test, my test, I can hear you. Hello, hello.

I can hear you, Angela, Stan. I can't hear the city meeting, though. Okay.

I didn't have any break.

Yes, members. I'm checking in with IT staff. So hold on. I'm not quite sure what's happening. Technical difficulties.

Thank you.

If you all can hear me still, Lance is looking into it. Sounds like it might just be a few members. He'll get back to us with a recommendation. Okay, if you can still hear me, Lance is recommending we just reconnect. Disconnect and re-login.

I'm back.

I don't know if the room can hear us though. I'm not seeing any nodding heads or shaking heads. I'll check back in with Lance.

Right.

You recommended Anne coming to do that training. We all really, really like her.

Yeah.

I said it was a trigger for me when you were like, now I love it.

We're live! Well, hi. Welcome over.

It's Tuesday night. We do that every time.

Okay.

So... Thank you, Peter. Thank you, Angela. Eric, I'm still not going to talk to you until your agenda item's up. We're looking for Joan. Joan, come in with us.

I was just going to go to bed.

Peter, we're right there with you. Peter's like horizontal. We're almost done, counsel. We're almost done. Sharon, bring us home.

Right, we're almost there. Okay. Page seven. Okay, we're almost there. I think this is the last, the last page. Other planning project, we talked about the permit system transition. We're supporting that with a half-time employee. public engagement, we are using social media campaigns for urban forestry and housing. And we are bringing up one of the below the line projects, which is like projects that we weren't sure we could get to, but we are at the citywide design guidelines that's coming to you together. So you're going to get a lot in the fall.

And engage.

Yeah. And so we're doing that with a very small team. Most things are on track, but some things are taking longer than anticipated. And there you have it.

That's why staff come to you to share, to tell you where they're at, right? So this is a great update.

Right. And so let's segue into the next.

Now we can all acknowledge Eric and say hi. Hi, Eric. Hi, Eric.

Good evening. Thank you for having me here. Shall I share my screen, Sharon?

You can break the internet. You can share it.

But why don't you share it, Eric?

Let's see if it crashes anything. Let's do it.

If not, we can do it. Yeah.

So we're on to multifamily tax exemption program evaluation in your tax. Correct. Preliminary findee.

Let me put this into the full screen. Can everybody see my screen? It looks like it's loading.

Yes.

How's that look?

There you go. Excellent.

All right, well, thank you again for having me. It's an honor to be here and it's been a privilege to work with Sharon and Brad on this project so far. So thank you again. So the topic of conversation is again, the multifamily tax exemption program that the city of Tumwater has currently on the books. What we've been doing is doing an evaluation of how effective it has been so far. And so I guess the short answer is, and I'll get into the data and analysis here in a second. And the short answer is, It really depends on what you're trying to achieve with the program. So the next slide is this just gives you an overview of the districts where the multifamily tax exemption currently is allowed to work and can be given to projects that are in these areas. So we have the Little Rock Road sub area. We have the Tumwater Town Center. We have the Capitol Boulevard corridor and we have the brewery district. Those are the four main areas. Now, the eight-year program that currently exists doesn't work in all of these geographic areas, but the 12-year does. The 12-year can apply to all four of these districts. This gives you a snapshot of where the most recent multifamily development has been in the city. This is looking at both MFTE projects. Sorry, Joan. Yes.

Could you say why the eight-year doesn't work?

I didn't say why. I haven't said why it doesn't work. Okay.

Are you going to the county district?

What's that?

I think Eric meant that the eight-year only applies in two districts, the brewery district and the capital corridor. Correct. It doesn't apply or it isn't an option available in the other two.

Exactly.

I think it's a word choice.

Yeah. My apology.

Thank you.

Yeah. So here again is a map of the again, the blue areas are the districts where MFT currently applies. And then we're looking at MFT multifamily tax exemption projects versus developments, multifamily housing developments that have been built. since 2017 in the city, but did not take advantage or did not receive a multifamily tax exemption. So as you can see here, a lot of this development has been happening over here, which was on, remind me what, Little Rock Road sub area. So the majority of MFTE projects so far to date have been concentrated in the Little Rock Road sub area with some smatterings up north in the Brewery District and a little bit in, the Capitol Boulevard corridor. There has been no development in the Tumwater Town Center to date that received a multifamily tax exemption. The green dots again are the non multifamily tax exemption projects. So projects, normal multifamily developments that have popped up in the city since 2017. And you can see they're a bit concentrated up into the Northwest. a little bit in the Capital Boulevard corridor area, and a little bit near the Little Rock Road sub area, but not directly in it. In terms of unit production, again, it's mostly been concentrated, again, in the Little Rock Road sub-area. So this is just a snapshot of the units. So up top, you'll see the 8- and 12-year options in the Brewery District and the Capitol Corridor. And these are the total number of units and the total number of projects that have been developed using multifamily tax exemption in those two districts. And then the 12-year option only with a 20% affordable set-aside. So 20% of the units must be deed-restricted affordable. In the Little Rock Road sub-area, there's been three projects and about 562 units to date. Some of those are market rate units, again, and again, 20% of those have been deed restricted as affordable. So this here is just a general overview of how affordable housing typically works. I thought it'd be helpful to sort of just give the council a little bit of a refresher on how affordable housing typically works. So Thurston County area median income is set by the U.S. Department of Housing and Urban Development. Currently, it is at $122,800 per year in income for a four-person household. Now HUD then breaks that down based on household size and unit type. So you can see in this top table that we have the... the percent of the area median income. So 100% would be 100% of the area median income and going down to 30%. And you can see, depending on the household size, so one person, two person, three person, four person, et cetera, and the unit type, a studio one, two, three bedroom unit, you're going to get different amounts of area median income that qualify. for those units. And then going from there, how we determine affordable rents, we take a 30% of that income, which is considered affordable by the US Department of Housing and Urban Development and divide that by 12. And that gives you the, monthly rent for that unit type and that household size. So as you can see here, you have one person household in a studio at 100% AMI, the most they could pay in rent would be $2,150 per month, for example. That's the most they could pay. Next slide. Now here's some data analysis we did. This we looked at market rents currently.

Erin, can you?

Yeah.

Eric, can we hold one second?

Brandon. Can you go back to that? Yeah, the maximum you're saying that they can pay up to $2,150 a month for one person?

Yes, if the unit is deed restricted to 100% of the area median income. So for example, in the MFTE program now, your current 12 year program requires between 80% and 115% of the area median income in terms of rent. So the rent could be as low as seven, for example, for a one person studio, it could be as low as 1,720 a month, or it could be even above that 2,150 a month if they can, if the market can support that, of course. Yes, Jim.

Is there anybody anywhere in these local cities or county or the whole country, anybody talking about changes in any of this stuff that the government has set as standards or 30% or 80% or this or that? Because this doesn't even make sense for today anymore. And so I'm just wondering, is there anything Is there any push anywhere that things like this could need to be adjusted?

There have been some efforts to do, for example, set a lower percentage of income as considered affordable. So there's been some efforts to go below 30%, say 20% of income. There's been some efforts on that front. Nothing has gone past Congress or anything like that. And then in terms of the AMIs, part of the challenge has been since, for example, the financial crisis of 2008, we've actually seen median incomes go up everywhere across the country. So if you look at even Tumwater back in 2010, you would see a steady progression of area median income continue to grow because people's incomes have actually continued to rise. Now, how that is counted, there's been some debate about whether we should count certain areas. For example, HUD oftentimes brings in other areas, not just county, but also sometimes brings in other metropolitan areas into the mix or other jurisdictions into the mix that maybe sometimes drives up or drives down the area median income. But generally speaking, there has not been any efforts to actually change how AMI is calculated by the Department of Housing and Urban Development.

Yeah, because yeah, the median income might be going up, but the poverty level is also going up. And so those two things are getting farther and farther apart. And I just wonder how, as a city, coming together with our constituents, no, I mean, our leaders here in Thurston County or whatever, I think some adjustments need to be made. We just have a lot of people that aren't going to make it. I know lots of people who can't pay that kind of rent.

Sure.

It concerns me that conversations about doing big things can start right here in a seven-member council.

Thank you. Thank you.

Eric, before you consider, thank you, Joan. Eric, before you consider, Brandon had something.

Okay, sorry about that. I can't see you.

In particular, but what mechanisms or areas are we able to go ahead and change this on?

We don't change the definition. You choose the percentage, right? Council chose 80 to 150. You can choose the percentage. We don't change the federal definition.

Correct. You could say on MFT, you could go down to as low as 50% AMI. But that doesn't necessarily mean a developer is going to build that project, right? And that's what we'll get into here in a second, right? Setting a lower set standard doesn't necessarily mean that those projects will get built.

I understand that. To me, though, it's disgusting. $2,150 for one person for a studio. That is not affordable. That's not a team. That's an example, right?

We're not. Yeah. Yeah.

Yeah, well, yeah, it's very difficult, but I understand what you're saying, but it's very difficult for anybody to get to those numbers with the same person that spent $2,100.

Right, but it's based on if you're making that, right? So if you're not making that, then this does not apply. So thank you.

Correct. Eric, keep going. Yep, and what I'll show in a minute is that in reality, people in Tumwater, most people in Tumwater are not paying that in rent. So I'll demonstrate that here in a second. So what we did here was looked at, this is what we did. We pulled data on what current rents are in Tumwater, right? So you'll see here in the green bar chart, those are the current observed rents, average rents for new construction, multifamily projects built between 2020 and 2026, so this year. And current rents on average across the city range between a studio and a three-bedroom unit from 71% of AMI, so about $1,500 a month in rent, to 81% AMI for a three-bedroom, which would be about nearly $2,500 a month in rent. So as you can see, the rent that I showed in the previous chart at $2,150 isn't actually rent that's being, you know, common rent in the city. The common rent is roughly between that 60 and 80% AMI range. So that is what we're currently observing as the market rate rents. And the orange chart demonstrates that. So the rents affordable at 100% of the area median income would have to be at $2,150. And that would be above what we've observed in terms of the data. So that's not really what rents, you know, are happening in the or achievable rents that are being observed in the city right now. So the main point here is that the actual rents are below what we would say as 100% of the area median income and are actually below what you're saying is the 12-year program. So it actually, most of the time, they're below the 80% to 115% that the multifamily tax exemption currently requires. And here is just demonstrating that on the same thing. So market rents are below the 12-year MFTE AMI range right now. So again, the current new construction average rents are 72% to about 77% in terms of area median income in terms of rent. One point I'd like to make, and I think it's really critical to highlight this point in the data, is we also looked at older properties in Tumwater. And what we observed is actually the rents that you all just spoke to trying to get to like 50 to 60% AMI, for example, are actually found in what we call naturally occurring affordable housing. And so naturally occurring affordable housing are older properties that simply can't command high rents because they lack some of the amenities that new construction projects often provide, or their older properties are just less attractive to a lot of individuals or families. And so actually the rents that they can charge are below what most new construction multifamily properties are. And so you actually have a good bit of... supply right now.

Yeah. Eric, thank you. Hold on a second. As I'm listening to Eric, I'm literally thinking home energy school. How would that impact these homes? Megan, go ahead.

Home energy.

Looking at this chart, a question about the chart that you're sharing right now. Are you saying that homes built in the 1980s are available for rent in our community for $788 a month?

Yes, there are a few properties. Part of the challenge is there are only a handful of actually properties that still exist in the city that were built in the 1980s. And of those that do exist, the rents are quite low because the quality of the product can simply not command high rents. So those buildings may actually be in need of some repair. They may be located in less desirable neighborhoods compared to what other market projects have been built. And so actually the rents that they can achieve on those units, the owner or the developer, are quite low. And they don't need to be high because they don't have any debt, for example, sitting on those properties. They don't need to cover debt a lot of times. And so you have what we call, again, naturally occurring affordable housing happening in the city that are just in older properties.

multifamily? Are these multifamily in the CERC?

These are all multifamily units. And again, there is not a large supply. Yes. Again, these are probably legacy renters who have been there for decades and maybe they live in a unit that's next door adjacent to a landowner. And they've been there a long time. And this is the observed rent that's been in place. I obviously don't know the ins and outs of those individual units, but I'm just speculating on what they may be. So the whole point here is that you actually have a good bit of supply of affordable housing in some capacity. And on the one hand, you're incentivizing the construction of new trying to incentivize the construction of new housing. But the existing affordable units that may be existing in your community are receiving no incentive to actually stay affordable.

One more follow up question. This doesn't quantify like how much supply is affordable. I'm very curious because I see the dollar amounts, but I don't know. Does this represent like two units or 200 units?

Good question. We can certainly come back to you and provide the information at our next council hearing. We didn't provide the full number. That would be a good data point to include. Thanks.

So this isn't about homes? It's not about houses? This is just all multifamily?

This is all multifamily because that's where the tax exemption applies to, just multifamily tax exemption. It only applies to multifamily developments.

So this is just one category of affordability or not affordability?

It's one category of housing type, correct. But multifamily also could be as small as a fourplex and go up to 100 units. So it covers a wide range of housing types.

But it's not people living in single houses?

It is not single family homes.

Or something like that.

Yeah. A duplex or a triplex would count as a multifamily project. Next slide is just giving you a little overview about our approach to our analysis. So this is our methodology. We call it a performa. It's a very technical term, but really it is just like a financial analysis. What we're doing is taking the costs, what it costs to build a building, a new multifamily building, and looking at the revenues that that project could achieve. So basically taking, again, those market rents that we've observed in the data and comparing How much of the revenue can cover the costs? And how much of the land budget exists? So what we're solving for is land. Because in order to build any multifamily housing, you need to identify a parcel of land for the project to be built on. And so if... the land budget exceeds what we observe as the median or typical land price, then we determine and based on the revenues and costs, we can identify whether a project is financially feasible to do. If the land budget is too small, what could the project can afford compared to what we observe as the typical land costs that we have a little gap and you'll see that in the bottom chart and call it what we there's a little gap between the land costs and the land budget. That gap means that the project is going to need some subsidy, probably of some kind, public subsidies, grants, other programs to help make sure that project is financially feasible. As part of this analysis, we also looked at what we call prototypes. So we looked at a couple of different housing types that would qualify for the multifamily tax exemption. So we have townhomes. On the left, we have three-story wood frame, small lot, we call small lot. So this would be like a 40 to 50 unit building with surface parking, as you can see in the image. And on the right, we have a three-story wood frame that has something more like a tuck under, or a large lot, sorry, a large lot, so a bigger site that can accommodate maybe up to 100 units. And then on the bottom one, we have a five-story wood frame building. This is going to be your highest density type of multifamily housing. So it's going to be, could be surface parked, or it could have what we call tuck under parking where there's a little bit of parking that goes underneath the building. And that would be the highest density type of multifamily housing we analyzed.

Eric, for just a moment, all of these examples are actually in Tumbler. The townhomes are up on top of Tumbler Hill. The wood frame is the North Street Apartments. And then the other two examples are Kingswood and Rockwell over in Little Rock.

Yeah, thank you, Brad. Appreciate that. Helpful. Next slide. So this is really what the gist of our analysis is, is we're looking at market rate development, okay? And we're looking at those different town homes and trying again, trying to solve for land. So what we observed in the data is that most vacant underutilized land comes around somewhere between $12 and $21 per square foot. That's how much it costs to acquire what we call vacant or underutilized land. This is going to be a parcel that's been sitting there, hasn't really been used for much. It's maybe dirt, or maybe there is a small building next to a large empty lot, and that would be something we consider underutilized. It isn't built out. So what we've observed is that most land costs, at least for that type, so vacant or underutilized land, is around $21 to $12 a square foot. Or sorry, $13, roughly $14 a square foot. And then we also looked at, well, what is the median price of land in Tumwater? So that's that black line you see up top, roughly about $48, $49. That tells us where roughly the middle in the market is. What is land transacting for currently? And what we've observed is that's roughly around $49 per square foot. Now, again, going back to the prototypes, the types of housing that we analyzed in our approach, so townhomes, three-story wood frame, three-story wood frame with a larger lot, small lot, and then the five-story wood frame, you can see here the orange bars are telling us based on market rate rents that we've observed in the data, this is how much land per square foot these types of buildings can achieve, can afford. So as you can see, only the three-story wood frame, the $14 per square foot, is the only prototype, only one, that can actually be built on potentially, if they're able to find a piece of land that costs $14 per square foot, The other ones fall short. They cannot pay the price of land. So that means they're infeasible. They cannot be built. And again, these are projects where there is no multifamily tax exemption. They're paying their property taxes. They're trying to build a new multifamily building. But unfortunately, they are financially infeasible. And this is part of the reason why I think, as I showed you in the map earlier of where the developments have occurred, you don't see very much multifamily development that is not tax exempt being built in the city currently, at least since 2020. Next slide. Now, if we apply the eight year multifamily tax exemption to those five different prototypes of housing, of multifamily housing, you can see there's a big change. So now, Going from the orange bars from the previous slide to the green bars, you can see most of those housing types can now afford most of the vacant and underutilized land that may exist in the city. So they can, for example, townhomes can now achieve about $23 per square feet in land. The three-story wood frame, both large and small, can get between $29 and $19 per square foot in terms of the cost of land. The only one that has a negative land budget is the five-story, higher-density housing type. Part of the reason for that is that is much more expensive. It costs much more to build that housing type. And so given what we've observed in market rents, even with a tax exemption, that project wouldn't be... built with the eight-year program. And that's actually what we've observed. We've seen that most of the multifamily housing development that's been built in Tumwater at least since 2017 has mostly been your three-story wood frame developments, three or four-story wood frame developments with mostly surface parking. And I think that we showed you in the slides, as well as some townhomes, for example, as well. Any questions on this?

I have a question. So how many take one of these? What is the rent going to be?

Pardon? As part of our analysis, we're taking that average rent that I showed earlier. Okay. Let me go back to this slide just really quick so I can just give you that. So this, see these green bars here, we took average rents and applied it to the unit types within the prototypes that we built, that we designed here for the analysis. And that gives us roughly what all the revenue that a project could generate, depending on the size versus the cost of building that project.

And not paying taxes for 12 years.

Well, so the first slide here shows they're still paying taxes and which shows that they're infeasible. The next slide says, okay, the green bars, they're not paying taxes for eight years. And now they can actually afford to acquire more land and actually potentially are feasible if they were able to acquire or able to find land at that price.

I thought we were talking only about 12 year.

This is the eight year right now. This is giving an example of if the eight-year were applied to these different housing types, are they feasible? Okay. And do we qualify for the eight-year here? You have two districts that currently offer the eight-year as an option.

And if it was 12- Eric, the eight-year, sorry, the eight-year does not have the affordable housing option. It's just production.

Karen Hollweg, yeah you don't have to you don't have to designate anything affordable living right afford. Karen Hollweg, yeah that's. Karen Hollweg, Because it's quite a thing, if you look at the one of the charts that he sent us or that we we saw you know, there was 600 and some units and 110 of them were affordable. I mean, that seems to be the ratio. That's bad. I mean, from my point of view, but...

Well, Joan, I'd like to challenge that because what I showed you earlier is actually market rents are at those same rents. What you're saying is affordable as in part of the MFTE program, you're saying it's between 80% and 115%. But actually what the market has been delivering in Tumwater since 2020 has been rents that are below that at 77% to 72% AMI.

So you're actually getting- I'm going to jump in for a second. Eric, I'm going to jump in. Thank you, Joan. One, we don't need to challenge counsel. So I'd ask for you to reframe that language next time. And then also, I'm just noting the time. There's a lag on technology. So Eric, you're talking over us because there's a lag. It is almost eight o'clock. This was just supposed to be a heads up to all of you. So I think I'm getting confused by Eric's presentation right now. So I would like us to wrap this up, go to the key takeaways and next steps and have council follow up with additional questions because there is not enough time tonight to go over this and I have more questions now than I did before this started. So can we get to the summary and we will follow up next time.

Okay. I'm sorry if I came across this challenging or questioning what you were, I was just repeating things that I thought I read and I may not have had all the All the different, you know, numbers and amounts in the right district. Yeah, and I wasn't intending to.

Yeah, Joan, you don't have to apologize. Joan, you are on council. Your job is to ask questions. You are golden. Brad.

I'd just like to offer staff is also available for the individual council members to answer some of these questions. And it took me a couple of read-throughs to understand it. So I'm more than happy to explain what I could understand as well.

That's perfect. Thank you. Did Angela, Peter, Judge, did you hear that? Connecting with Brad and Sharon about this more thoroughly, because this is going to be an ongoing conversation.

Thank you. Can we ask for a one-hour presentation or sit down and talk about this? Because I have more questions than I could think of.

Yeah. Agree, Peter. Great idea. Yes. Like, we're just beginning this. And so, Peter, all of council is shaking their head in agreement with you. So, yes, we'll work with that with Brad and Sharon. Before we get to Paul, Eileen.

So, and just to clarify for them is that we're not even, we won't be looking at this until 2027. And it's not even until December of 2027, right? Yeah. Because we're waiting for him to finish his. Preliminary findings. Right. And so. So that, I just, yeah, I wanted to kind of...

But it's the perfect timing, right, to really dig into this, right? We have a year.

Three years report. It's really good.

We're not rushing this, right? So great comment, Peter. We'll do that, right? And thank you, Joan. And then Paul.

I was just going to say that I'll have Brittany reach out and coordinate meetings with Brad and Sharon. We'll have Brittany or Jessica, one or the other, will reach out and schedule, offer meetings for you to schedule on your team.

Yeah, perfect.

I think we're going to the key takeaways now.

Yeah. So the main, the last slide here and I'll go to the key takeaways was just pointing out that going to the 12 year, if we apply the 12 year, you can see most in the green bars, it actually then becomes even more feasible across all these different housing types.

Can you jump to the last slide? Key takeaway slide, Eric, and maybe walk through? Yes.

So just to reiterate some of the points I've tried to make is the current program is influencing housing development outcomes. So you are getting housing built as a result of the program, which I think is really important. We need supply just as much as we need affordability. And part of getting affordability is actually having supply of housing. The second point is market rate rents are within the affordability requirements. So the point here is that you have a 12 year MFTE program. But you're really just delivering more market rate housing because most of the affordable units are actually roughly at market rate rents in the city. So you're not actually delivering any deeper affordability results. Third point is, again, older properties are a source of what we call, again, naturally affordable housing. So you do have affordable housing in your community. And I think it's critical to also think about maintaining that affordability on existing units is an important thing. Fourth point is without MFTE, again, most market rate projects wouldn't be possible. So you wouldn't get the supply of housing that you actually need to have in your community, regardless of what you think about rents. So it's really important to get supply as a driver to drive down rents as well. With MFTE prototypes, most of them can afford vacant or unutilized land, but doesn't mean they can afford all parcels of land. So MFTE helps, again, on feasibility. And then the second point, which I didn't get to show on the slide, was if you require the MFTE, it goes even deeper in terms of the affordable housing requirement. So let's say you set 20% of the units at 70% of the area median income. Most of those prototypes then are no longer feasible. So you're not going to necessarily get those units built, even if you ask, you know, demand deeper affordability. So this is a calibration exercise. We're trying to find the right portable set aside to make sure development still continues to occur without making it too burdensome to be able to achieve the actual housing development that the community really needs. So some, I guess, questions for the city and priorities and, you know, should MFT focus on delivering as many deeply affordable needs as possible or should it be on that incentivizing housing production? Again, we need housing supply just like we do also need affordability. Should geographic areas stay the same or be revised? This question for you all, I don't know, you know your community better than I do. So curious if there are other geographic areas you think where this would be better applied in terms of trying to get housing outcomes that you wanna see. And then third is should the city place greater priority on preservation? Again, going back to that point that you do have affordable housing and older properties and preservation of those properties and preservation of those affordable rents is an important as well. So just in terms of next steps, again, we're doing task threes coming up. We're doing a deeper analysis of the multifamily tax exemption design. That includes looking at a 20-year MFT option. So that's something we'll look into. And then task four, we'll provide a final report as well as a fiscal analysis looking at the fiscal tradeoffs of this program versus not having it, for example. So that's something that will be included in our task four final report. And then our next meeting, in terms of the council meeting, will be on January 12th. And we'll report back on where things have landed.

One thing I'm going to ask is the next presentation be in person, whatever that looks like, because there's a lag. And now I'm even more annoyed because of the lag. So I'd like the next one to be in person.

Sounds good.

Happy to do it.

so when we come back in january we'll be bringing a staff report with recommendations what code changes what we think we would suppose because we're trying to achieve two goals one is housing production and one is affordability and this is tied to the other uh consultancy they're looking at um other ways we could achieve affordability mfc isn't the best way to try to meet every goal maybe it's better to just have it be for housing production and have other programs available for right and this

In the interim, one-on-ones with staff and any other updates can also come to council, but also general government, right?

We'll be seeing this in general government.

So ongoing work. This is just the beginning phase. We all have questions, which means we're all engaged and we're all dedicated to figure something out to serve our committee. So this is awesome.

You're also welcome to email if you have email questions, and we can get them answered, and then we can share them with all of you. So that might be another way.

I'm going to have to take it ready.

Good.

Just noting the time, it's 7.57. Mayor Pro Tem, what did you have?

I just wondered whether, and this goes to the Planning Commission and Equity Commission too.

So this is not an actual, we're not taking the code through yet. We're just looking at what you want to do with it. So when we come to you in January, here's some options, what would you like to do? Then you'll be directing us. We want to do this. Then we do the code change and then it goes through the whole document.

This came from the when Michael Althauser on council with Joan Cathy and myself in general government, right, working with Brad, they were like, is this even working? Are we like, it's so arbitrary. Are we making up these percentages? And so the concept was, yeah, we allow it right now, but then we got to study it and figure out in the scheme of Tumwater and the regional housing council and all the other inner city transit, TRPC, what does it really look like for Tumwater? And so that was the negotiation. We let this keep going and we figure out how we're going to move forward and what that really looks like.

We'll be coming back to you with those findings, and you'll direct us. Yes, you want to do this or that, and then we'll do this.

And then I think that's where the engagement of the Equity Commission and the Finance Commission, whoever else you think needs to be talking about this.

Joan, did you have something? I don't want you to sign me up with Brad because it'll make his hair stand on end or something. He's talked to me so many times and had many thoughts.

You see his body posture right now, Joan? Yeah.

So don't put me on his list for people to talk to.

Yeah, we're going to have you circle back with friends.

Yeah, I'll circle back. Make us both dizzy.

We have Mayor, City Administrators Report. My report is at 759, and I'm done for the day. Paul?

If you're done, I'm done.

Meeting adjourned at 759. Thank you, everybody.

Thank you, Mayor.