City Council

Oak Harbor City Council Workshop Meeting Minutes February 25, 2025 This was both a physical meeting location and a virtual meeting. Meeting was viewable via YouTube at www.youtube.com/cityofoakharbor, on Facebook, and following the meeting on Cable Channel 10/HD 1090 CALL TO ORDER Mayor Wright called the workshop meeting to order at 1:00 p.m. ROLL CALL City Council Present: Staff Present/Videoconference Mayor Ronnie Wright City Administrator Sabrina Combs Mayor Pro Tem Tara Hizon Deputy City Administrator David Goldman Councilmember Jim Woessner Development Services Director David Kuhl Councilmember Bryan Stucky Public Works Director Steve Schuller Councilmember Eric Marshall Human Resources Director Emma House Councilmember Christopher Wiegenstein Police Chief Tony Slowik Councilmember Barbara Armes Fire Chief Travis Anderson Councilmember James P. Marrow Principal Planner Rajesh Cac Kamak Grants Administrator Wendy Horn Executive Services Coordinator Macalle Finkle Communications Officer Magi Aguilar City Clerk Julie Nester Also in attendance: City Attorney Bob Zeinemann of Kenyon Disend, PLLC MAYOR Mayor Wright welcomed all in attendance. He observed public comments are not normally taken at workshop meetings, although the Council may allow or request public participation on action items. There were no action items on the agenda today. Mayor Wright thanked Mayor Pro Tem Hizon for presiding over the February 18th City Council meeting while he and City Administrator Combs attended the Association of Washington Cities (AWC) City Action Days and met with local legislators in Olympia. He observed that we are extremely fortunate to live in a state where the Attorney General and Governor are working hard to represent the values of all in our state. CITY COUNCIL Mayor Wright called on the Council for any comments and invited Councilmembers to provide any up- dates on the City’s boards, commissions or committees on which they serve. Workshop Meeting Minutes February 25, 2025 Page 1 of 5 Councilmember Stucky reported on the Island County Tourism Board which is meeting with elected bodies next month to work on an Interlocal Agreement. He also requested if a new parking bill that is under consideration in the legislature passes, could staff provide an update for what that means for Oak Harbor. Public Works Director Schuller and Development Services Director Kuhl will review this. CITY ADMINISTRATOR a. Monthly Departmental Reports City Administrator Combs noted the monthly departmental reports were provided in the meeting packet. Councilmember Stucky inquired about permit numbers. City Administrator Combs noted staff would email these to the Council prior to the end of the workshop. Councilmembers Woessner and Marrow voiced appreciation for the information and detail provided. DEVELOPMENT SERVICES a. 2025 Comprehensive Plan Update Principal Planner Kamak introduced consultant Clay White of Kimley Horn, the firm assisting the City in the development of the Comprehensive Plan. Principal Planner Kamak explained this update was being provided as a follow-up to the joint meeting with the Island County Board of Commissioners held on February 11, 2025. Staff and Mr. White of Kimley Horn were in attendance to answer any questions on the City’s Land Capacity Analysis (LCA) and potential ways to move the discussion of the Urban Growth Area (UGA) with the County forward. Principal Planner Kamak reviewed the steps taken by the City thus far. The City obtained grants for the planning process and hired the consulting firm of Kimley Horn. He explained the methodology utilized by the City in completing the LCA in compliance with the Countywide Planning Policies (CWPP), adopted by the County and by all cities and towns in Island County. The City shared the resulting analysis with the County, who responded with suggestions for Area Median Income (AMI) numbers in higher amount within the city limits and with low density adjacent to the Urban Growth Area (UGA) that were outside the process. Staff then requested clarification, and the County ultimately requested mediation. In the joint meeting, the County stated it was requiring the City accommodate 41% of 0-50 AMI, high density housing, within the City limits. Mayor Wright called upon Attorney Zeinemann to speak to inaccuracies stated by the County at the joint meeting. Attorney Zeinemann noted he had researched and found numerous statues and Washington Adminis- trative Codes (WAC) pertaining to the comprehensive planning process and that any assertation that the County has the ability to block cities comprehensive plans is inaccurate. He explained that via the GMA, counties and cities complete their comprehensive plans as equals and are then required to per- form coordination to align along shred borders. The WAC’s provide direction on how this coordination is supposed to work. If needed, the state can provide a mediator. If resolution is not achieved, the state can sanction one or both parties. Comprehensive plans are valid unless considered invalid by the Growth Board. Mayor Wright thanked Attorney Zeinemann, noting he had also discussed the City’s process, and the grants received for the consultant with state legislators during the recent Association of Washington Workshop Meeting Minutes February 25, 2025 Page 2 of 5 Cities City Action Days. Staff today intend to review the CWPP process, the LCA process, the County’s requirement and to answer any questions from the Council. Principal Planner Kamak noted the City went through the CWPP analysis and shared this with the County. Within the CWPP there are growth targets for housing and employment, and the methodology used in completing the LCA. This process is the same for all within the CWPP. The City’s LCA was consistent with the CWPP. Principal Planner Kamak explained that the first consideration is how much capacity the City has to meet population and housing requirements. If there is a shortfall, then the City must consider how to increase its capacity. The City suggested using the UGA and asked the County for their numbers. Consultant White noted it used to be that only population and economic growth were considered, but this process is more complicated now with the added consideration of the types of hous- ing to be planned for. Principal Planner Kamak noted this was the purpose of the workshop discussion, determining if the Council was comfortable with taking the County’s legislative input to amend the City’s LCA, or if the Council would prefer the City complete a different methodology to take on the County’s 41% AMI re- quirement within the city limits. He noted that if the City were to do so, more expansion would be needed. The County has requested the City provide an expansion map for the deficit of what this would include and have requested the City provide a revised plan by April. Mayor Wright observed some areas were not considered for housing and growth due to lack of infra- structure. Consultant White explained the Council had three options to include in their consideration: 1. Utilize the existing LCA, including market factors, some of which may develop and some of which may not, with the current LCA being 50% of the market factor. Other market factors included infrastructure, parks, and so on. 2. Create as much capacity as the Council chooses by utilizing zoning, however it is not recom- mended to create capacity that is unlikely to occur during the period covered by the plan. 3. Uncertainty of where the County would land on their own numbers analysis. Mayor Wright, Mayor Pro Tem Hizon, and Councilmembers Marrow, Woessner, Marshall, and Armes provided their respective questions and comments. Staff will continue to work towards a solution, taking into account Council feedback, and will bring updates back to the Council next month. FINANCE a. Local Business and Occupation Tax Informational Item Deputy City Administrator and Finance Director Goldman reviewed the item. He noted he had presented multiple agenda items over the course of several City Council meetings related to the adoption of a local Business and Occupation (B&O) Tax to fund community identified items that were discussed by the Council. Previous meetings at which a B&O Tax were discussed: • March 27, 2024 City Council Workshop • May 21, 2024 City Council Meeting • Mentioned during the budget hearings and workshops conducted for the 2025-2026 Biennial Budget and other Council items Following City Council direction, staff held outreach activities regarding a local B&O Tax. On December 18, 2024, Deputy City Administrator Goldman led two public B&O Tax Talks where he presented the details of a potential local B&O Tax and answered questions from the community. Workshop Meeting Minutes February 25, 2025 Page 3 of 5 During the discussion about the potential for the creation of a Port District at the January 21, 2025 Council meeting, the implementation of a local B&O tax was also discussed. Potential items to be funded by a B&O Tax proposal as identified by the community and discussed by the Council included the City of Oak Harbor Marina, a future indoor Recreation Center, and funding consideration for infrastructure needs such as the City’s aging Police Department building and City Hall building. There are four major general revenue sources available for cities: Property Tax – Limited to 1% plus new construction or requires levy lid lift vote. Sales Tax – Growth has leveled off. Utility Tax – City is at State average. Recently increased to pay for Indigent Defense and police officers. Local Business & Occupation Tax (B&O)– Available and not yet utilized. Deputy City Administrator Goldman reviewed which cities in western Washington collect a B&O Tax and whether they utilize a manufacturing rate, a retail rate, a services rate, or a wholesale rate. A B&O Tax would require Council approval. The maximum tax rate is 0.002 x gross annual receipts. 0.002 = 1/5 of 1%. A handful of cities have higher grandfathered-in rates. The minimum tax threshold = $20,000 gross annual receipts (exempt from tax). Tax thresholds range from $20,000 to $1,000,000. Deputy City Administrator Goldman provided the following chart of estimated B&O Tax collection options for Oak Harbor: • Due Date = Quarterly returns due by the end of the following month. • Various exemptions and deductions per State law and the OHMC. • Late Fees, unpayment, and Interest = Varies. Per RCW 82.32.050 and 82.32.090. • Electronic payments preferred. • Business under the threshold can submit an exemption from filing form which will reduce paper- work on both staff and the business owners. • Administrative appeal process included. Workshop Meeting Minutes February 25, 2025 Page 4 of 5 Deputy City Administrator Goldman requested Council input. Councilmembers Armes, Woessner, Stucky, Marshall, Marrow, Mayor Pro Tem Hizon and Mayor Wright provided their respective questions and comments. Staff will review Council input and return with a proposal and any additional information at a future meet- ing. ADJOURN Mayor Wright announced the next Community Catch-Up – An opportunity to meet with community part- ners and leaders was this evening at 6:00 p.m. and features I-COM 911 with Executive Director Sophia Kohfield. The event is in Council Chambers, followed by a tour of the I-COM facilities across the street from City Hall. There being no further business, Mayor Wright adjourned the workshop at 2:40 p.m. Certified by Julie Nester, City Clerk Workshop Meeting Minutes February 25, 2025 Page 5 of 5