City Council

Oak Harbor City Council Workshop Meeting Minutes May 22, 2024 This was both a physical meeting location and a virtual meeting. Meeting was viewable live via YouTube at www,youtube.com/cityofoakharbor, on Facebook, and on Cable Channel 10/HD 1090 following the meeting CALL TO ORDER Mayor Wright called the workshop meeting to order at 2:00 p.m. ROLL CALL City Council Present: Staff Present/Videoconference Mayor Ronnie Wright Interim City Administrator Sabrina Combs Mayor Pro Tem Tara Hizon - absent Deputy City Admin. & Finance Dir. David Goldman Councilmember Jim Woessner - absent Development Services Director David Kuhl Councilmember Bryan Stucky Public Works Director Steve Schuller Councilmember Shane Hoffmire City Engineer Alex Warner Councilmember Eric Marshall Police Chief Tony Slowik Councilmember Christopher Wiegenstein Interim Fire Chief Gordon Olson - absent Senior Planner Ray Lindenburg Councilmember Barbara Armes Assistant Planner Nolan Grunska Central Services Manager Sandra Place Executive Services Coordinator Macalle Finkle City Clerk Julie Nester Also in attendance: City Attorney Hillary Evans of Kenyon Disend, PLLC MAYOR Mayor Wright welcomed all in attendance. He noted Mayor Pro Tem Hizon and Councilmember Woess- ner were absent. Mayor Wright observed the Council had a very late meeting last evening. He thanked both City staff and the Council for their hard work. He noted he had asked the executive staff for their ideas on how to reduce the length of meetings, including the potential of adding additional meetings, as needed. Mayor Wright stated he would like to hear the Council’s ideas on this topic as well. He observed that last night, items that received very few questions or comments when presented to the Council at prior workshop meetings, became lengthy discussions. In the interest of not lengthening the workshop today, he asked the Council to please submit their ideas to both he and Interim City Administrator, Sabrina Combs. Mayor Wright noted he valued the Council’s comments and that their participation in improving the meeting process was appreciated. DEVELOPMENT SERVICES Workshop Meeting Minutes May 22, 2024 Page 1 of 7 a. Introduction to Missing Middle Housing Senior Planner Lindenburg presented and provided background information, which was also reviewed with the Planning Commission and will be included in the Comprehensive Plan process. He explained that over the past several years, the City has worked on numerous pathways to increase housing af- fordability and availability. Previous efforts have included: the Affordable Housing Taskforce and the priorities list developed, which lead to revisions to the Accessory Dwelling Unit (ADU) ordinance; dis- cussion of tiny homes and other alternative living arrangements; increasing density allowances by re- ducing lot sizes; and increasing thresholds for SEPA review, streamlining the development process. The State of Washington has also been active in the pursuit of housing availability and lowering costs. Over the past year, bills have been passed addressing the number of ADUs permitted on a parcel, standards for design criteria and others intended to require cities to review and potentially revise their codes to allow for greater densities and hopefully lower costs. Because of the amount of time and resources needed to tackle such a large project, the City has applied for, and received, a grant to work on research and solutions to the lack of housing and increasing costs. The grant is based on the following deliverables: • Comprehensive Plan section with policies that implement HB 1110 standards. • Development code language that implements HB 1110 standards. • Amend Design Regulations and Guidelines document to include all residential projects, consistent with HB 1110 and ESHB 1293 • Development code language that implements affordable housing density increases Senior Planner Lindenburg provided information on current staff’s action to review and enhance the potential for construction of so-called “missing middle housing” – that housing that is not located in sin- gle-family arrangements or in large apartment buildings. For example, duplexes, tri-plexes, four, five, and six-plexes, townhomes, courtyard apartments, cottage clusters and similar configurations. He ex- plained ADU’s are not defined as middle housing but do provide infill housing that fits into residential neighborhoods. Senior Planner Lindenburg noted staff is reviewing what other jurisdictions have done and are doing to solve the issue and provided some insight into the process from the City of Oak Harbor viewpoint. Staff have applied for and received a grant to continue this work. Councilmembers Stucky, Marshall, and Hoffmire provided their respective questions and comments. b. Glenn Haven Plat Amendment Request Senior Planner Lindenburg explained that recently, a resident living in the Glenn Haven subdivision on SW 1st Avenue asked staff if they would be permitted to construct a new fence along their northern property line adjacent to West Whidbey Avenue. After looking at the approved plat of the subdivision, staff determined that this would not be permitted, as the plat includes language to provide for a 20-foot landscape buffer along the Whidbey Avenue frontage, including language that required the individual property owners to maintain the buffer, and prohibiting construction within that area. Staff has been unable to locate a landscape plan for the subdivision, and there is no specific language on the plat face stating what should be allowed to, or planted to, grow in that space. It is the assumption of staff that the original intent from the 1996 plat approval was to allow for existing trees and other native vegetation to grow in that buffer area, presenting a more natural environment along the Whidbey Avenue corridor. In the intervening years, new development has occurred along the south side of Whidbey Avenue, including two divisions of the Hawthorne Place subdivision and the Workshop Meeting Minutes May 22, 2024 Page 2 of 7 Whidbey Cottages development. Notably absent from those two developments is a 20-foot buffer of any type. The Hawthorne Place subdivision developed from 1996 to 2002 includes wood fencing along most of the northern property lines of the lots, approximately 1-2 feet away from the Whidbey Avenue sidewalk (presumably defining the property line between private lots and public right-of-way). Whidbey Cottages, developed in 1997, includes a short picket fence, landscaping and a sidewalk provid- ing pedestrian access to units within a 20-foot distance to the northern property line. Review of aerial photos of the Glenn Haven subdivision since 2006 shows a varying level of mainte- nance and removal of vegetation from the buffer areas by individual property owners. Currently, it ap- pears that some owners have removed most, if not all vegetation by cutting and mowing. Some have few changes, allowing native and non-native plants to grow. The result is likely not the intent of the original approval, providing a somewhat patchwork quilt of manicured grass to somewhat native appear- ance. Since that initial contact from the Glenn Haven property owner, staff has been provided a list of names of property owners expressing unanimous agreement to remove the landscape buffer requirement from the approved plat via a petition. This would have the effect of allowing, but not requiring property owners to construct a fence at the north property line of their individual lots. This change would allow for more flexibility for property owners, and in the staff’s opinion, would not be detrimental to the appearance of the Whidbey Avenue corridor. Currently, there is a strong manicured appearance traveling east to west on the street. From the inter- section at Oak Harbor Street, development is continual on both sides of the road, including the above- referenced developments on the south side, Whidbey Cottages and Hawthorne Place, and single-family homes lining the north side. There are no landscape buffers until one reaches the Glenn Haven subdi- vision, and if that requirement were removed, there is a semblance of a buffer beyond to the west, though the lack of sidewalk in that area is likely to eventually change, which would necessitate a change in appearance there as well. Senior Planner Lindenburg explained RCW 58.17.215 guides the process for a plat amendment. Staff presents this information today with an invitation to comment or ask any questions, with the intent of returning at a future meeting to formally review and consider a change to the approved plat for the Glenn Haven subdivision. Options for changes include the following: 1. To strike the “LANDSCAPE BUFFER” and “NOTE” sections from the plat. Property owners would be permitted to build fences in the removed buffer area, including north/south fencing separating yards and along the north property lines individually as they see fit. 2. To strike the two sections with the caveat that a continual natural material fence be constructed along the north property lines of lots 1-11, creating a more consistent appearance similar to that at Hawthorne Place. 3. To leave the two sections in place and maintain the existing plat language and requirements. Councilmembers Stucky, Hoffmire, Marshall and Armes provided their respective questions and com- ments. Staff will bring an item to the Council at a later date. FINANCE a. Clean Water Facility Debt Refinancing Options Workshop Meeting Minutes May 22, 2024 Page 3 of 7 Deputy City Administrator and Finance Director Goldman presented the item and provided background information. He explained the City took out six debt instruments to help fund the construction of the City’s Clean Water Facility. Five debt instruments were State Revolving Fund (SRF) Loans provided by the Washington Department of Ecology (DOE) while the other debt instrument was a private sector bond. The payments for the private sector bond are interest-only through 2036, with the first principal payments due beginning in 2037. During the March 31, 2022 City Council Retreat, an idea was brought forth to explore the possibility of obtaining debt relief from the State regarding State Revolving Loan (SRF) debt that was taken out to fund the Clean Water Facility (CWF), which staff pursued. During the April 26, 2023 City Council work- shop, Deputy City Manager Goldman presented an option provided by the State to refinance and con- solidate the five outstanding State Revolving Fund Loans. The City Council declined to proceed with that option and instructed staff to continue to search for more advantageous options. As a result of City efforts, staff was notified earlier this year that the DOE would be able to refinance our Bond debt in addition to consolidating our outstanding SRF loans. Consolidating the SRF loans and refinancing the private bond generates a savings of $2,026,216 over the life of the debt (through 2049). These savings are primarily due to the lower average interest rates of the DOE proposal (From 2.008% to 1.775%,). The DOE proposal extends debt payments out to 2049 (from 2038 to 2049 for the five SRF loans and from 2046 to 2049 for the private bond). Since the five SRF loans are owned by the DOE, the consolidation could take place this year with the first payment being due in January of 2025. The private bond, however, has a covenant which stipulates that they are not “redeemable” (able to be refinanced) until on or after December 1, 2025. Due to this, and based on funding availability from the DOE, the earliest the first payment would be due under this scenario would be in July of 2027. Deputy City Administrator Goldman provided tables to demonstrate the effect on City payments and explained the DOE Debt Restructuring Analysis, the effect of utility taxes, and proposals for debt re- structuring. He noted that to keep General Fund utility tax revenues at the same level as today so that General Fund services and activities can continue to provide the same levels of service, utility tax rates would have to be increased. One option would be to only increase sewer utility tax rates while another option would be to increase all utility taxes rates on city owned utilities (Water, Sewer, Solid Waste, Storm Drain) by the same amount. If only sewer utility tax rates were adjusted, they would need to be increased from 6.25% to 7.41% (0.25% goes to the Creative Arts Fund which would stay at the same level and not be affected by this change. If utility tax rates on all city owned utilities were increased, they would need to be in- creased by 0.582%. The utility taxes generated are equal between the options. Sewer Operations and Maintenance: Deputy City Administrator Goldman noted the preceding discussion and analysis only addressed the sewer rates attributable towards debt payments. The remainder of the sewer rates fund all other Sewer costs including operating, maintenance, and new/replacement capital needs. Rates have been reduced and have not increased over the past few years. During the last approximately four years (January 2020 through March 2024), inflation has averaged 4.54% per annum. This translates to an increase in inflation of 21.25% over that 54-month period. Deputy City Administrator Goldman presented current Clean Water Facility debt and potential debt re- structuring information, including additional utility tax discussion information. Workshop Meeting Minutes May 22, 2024 Page 4 of 7 On September 2022, the City Council adopted, per Ordinance 1961 utility rate schedules for 2023, 2024, and 2025. Water and storm drain utility rates were not increased, sewer utility rates were reduced by 3%, and solid waste utility rates were adjusted slightly to consider changes to help better align the dif- ferent services (yard waste, recycling, roll-carts, and dumpsters) with the cost of operations. Due to increasing costs and potential capital project needs, it is anticipated that utility rates will be studied during 2025 with the results provided to City Council for consideration. Councilmembers Hoffmire, Marshall, Stucky and Armes provided their respective questions and com- ments. Mayor Wright thanked Deputy City Administrator Goldman for his diligent analysis. FIRE DEPARTMENT a. Fire Department Annual Report Interim Fire Chief Olson provided the Oak Harbor Fire Department report for 2023. He praised the work of the department and provided the following highlights including: Land area served: 9.714 square miles Population: 24,780 Increase of calls, nature of calls and investigated incidents. The department received 1,686 emergency response calls for service, a 19% increase over the past five years. The department responded to 60 fires last year. The department investigated 19 incidents. 8 had significant structural damage with losses estimated at $182,000. The value of property and contents saved equaled $1,745,000. More importantly, there was no loss of life. Kitchen fires are the biggest cause of structural fires in the nation. Commercial inspections: 826 Medical calls: 803 – most with co-responders. Noon is the busiest hour for calls. Chief Olson also highlighted training and documented hours of 5,299. He noted the department “…does not just train until we get it right, we train until we can’t get it wrong.” Training provided to the public included CPR/First Aid/ AED courses with at least one class offered per month, free of charge. Other highlights included Smoke Detector Education events, School District events, and Community events. Chief Olson explained that overlapping and concurrent incidents post a growing problem and that the addition of Fire Station #82 will help to ease this. He reviewed the current and projected scheduling and personnel for both Station #81 and Station #82. He closed with an outline of his mission, vision, values, and guiding principles for the department. He encouraged the Mayor and Council to look for the following attributes in the next fire chief: Teacher, Coach, Mentor, Vision, Communication, Tactilely Proficient, and willing to engage with the community. Mayor Wright thanked Interim Fire Chief Olson for his leadership and vision. Councilmembers Hoffmire, Stucky, and Marshall provided their respective questions and comments. PUBLIC WORKS a. City of Oak Harbor Equipment Rental and Replacement Fund Workshop Meeting Minutes May 22, 2024 Page 5 of 7 Central Services Manager Sandra Place provided an overview of the Equipment Rental and Replace- ment (ER&R) funds. ER&R funds are established to provide equipment repair and rental services within local governments. The mission of the ER&R fund is two-fold. First, City staff aims to provide safe, efficient, and economical fleet services for the city by providing the highest level of fleet services at the lowest possible cost. Second, it is to provide safe, efficient, and economical fleet replacements. Manager Place reviewed the staff involved in managing procurement and rental and repairs. She ex- plained the management of the City’s ER&R fund is responsible for assuring that the fund's operations comply with what is set out in the Oak Harbor Municipal Code under Chapter 3.20, titled Equipment Rental Fund. This includes rates that cover the costs of operation and equipment replacement, charges to equitably allocated departments, tracking of equipment, and investment of excess funds. Two funds that work together under one policy ♣ Internal Service fund for O&M costs (Fund 501) ♣ Long Term fund for replacement (Fund 502) ♣ Policy addresses ♣ Cost recovery ♣ Replacements ♣ Additions to the fleet ♣ Vehicle/equipment specifications ♣ Fleet standardization ♣ “Rightsizing” ♣ Disposal ♣ Central Equipment Pool (Motor Pool) In addition, the City's Operating Budget Policies specifically state that biennial operating budgets should provide for the maintenance and replacement of the City's capital, plant, and equipment and that the City will maintain all its assets at a level such that it protects the City's capital investment and minimizes future maintenance and replacement costs. Maintaining a sound vehicle/equipment fleet will cost the City the least in the long run because it allows our city departments to be efficient and produce the best results for the agency’s constituents, the citi- zens. Manager Place provided examples of both in-house work performed by the public works depart- ment, and out-of-house work performed by other service providers. She reviewed costs and labor hours by department/division. Challenges included: Availability of Parts for an Aging Fleet of Vehicles New Technology Minimizing Downtime with a Lean Fleet Manager Place also reported on fuel use and costs, insurance costs, environmental considerations, including electric and hybrid vehicles, and recycling efforts. She provided details for the Replacement Fund and its use for minor equipment, repair and maintenance, and capital replacements. Manager Place explained vehicle and equipment replacement schedules and needs, as well as right- sizing of equipment. She explained the procurement process and tools, and budget considerations. Councilmember Hoffmire provided his respective questions and comments. Workshop Meeting Minutes May 22, 2024 Page 6 of 7 ADMINISTRATION a. Monthly Departments’ Report Interim City Administrator Sabrina Combs noted the staff’s combined monthly report was included for Council information and she appreciated all of staff’s efforts. She noted that additional reports would be forthcoming and would be provided to the Council. There were no questions or comments from the Council. CITY COUNCIL a. Oak Harbor Yacht Club 2023 Annual Report to City Council Oak Harbor Yacht Club Vice-Commodore Robert McCrary provided the annual report. He introduced Maura Rosenfelt, with accounting, and Laura Wordell, event planner, who addressed the Council to request the Yacht Club’s rent not be increased. Mr. McCrary highlighted the organizations the Club works with in the community, and club membership. He provided the Club’s financial summary with $228,481 collected and $227,426 expended. He noted revenues were flat, but expenses had gone up exponentially. Improvements to the building in 2023 included renovation of the upstairs ballroom and structural repairs to the building exterior. Councilmembers Stucky, Hoffmire, Marshall and Armes provided their respective questions and com- ments. Mayor Wright thanked Mr. McCrary for his report. He echoed Council comments in questioning the validity of the financial statements versus what had been presented and requested that the Yacht Club provide additional information in a week to ten days. Mr. McCrary agreed to do so. CITY COUNCIL COMMENTS There were no additional comments from the Council. ADJOURN There being no further business, Mayor Wright adjourned the workshop at 4:24 p.m. Certified by Julie Nester, City Clerk Workshop Meeting Minutes May 22, 2024 Page 7 of 7