City Council - Regular Meeting

[Music] Good evening everybody and welcome to the regular meeting of the Bellingham City Council this October 20th, 2025. Uh I will call this meeting to order. Bellingham City Council meets all requirements of the state of Washington Open Meetings Act.

Before we begin, we acknowledge that we are gathered on the transitional traditional and unseated territory of the Lummy, Noosack, Samish, and Seamyu people who have cared for and tended this land since time immemorial.

Truth and acknowledgement are critical to building mutual respect and connection across all barriers of heritage and difference. We began this effort to acknowledge what has been buried by honoring the truth.

We pay respect to their elders, past and present. Please take a moment to consider the many legacies of violence, displacement, migration, and settlement that brings that bring us together here today.

And please join us in uncovering such truths at any and all public events. The Bellingham City Council provides Spanish interpretation at all regular evening meetings. Inter- interpretation can be accessed by in-person attendees by utilizing the headsets located at the front of the room.

Remote viewers can log on to co.org/cczoom /cczoom and click on the language icon at the bottom of the screen to listen in Spanish. And I'll let our interpreter repeat that. language. Thank you. And we have notice of several upcoming public hearings.

On November 3rd, 2025, the Bellingham City Council will hold three public hearings to take public comment on the following items. Number one, a proposed ordinance relating to land use and zoning, extending interim zoning regulations to eliminate minimum automobile parking requirements and establishing consistent bicycle parking standard citywide for an additional 6 months.

Number two, a proposed ordinance adopting the 2025 city of Bellingham comprehensive plan, including the future land use map. These proposed revisions comprise the Bellingham plan and address recent state legislation changed conditions and shifted priorities.

And number three, uh the proposed 2026 budget. The proposed budget has been filed with the the city clerk and is available to view online at www.co.org/budget. Hard copies are available to view in the finance department at city hall which is at 2110 Lah Street.

Detailed information on each item will be available on meetings.co.org 5 days before the hearings. Roll call, please. >> Hannah Stone >> here. >> Dan Hamill >> here. >> Skip Williams >> here. >> Lisa Anderson >> here.

>> Michael Lilloquiz >> here. >> Jay Cotton >> here. Holly Huffman >> here. >> All council members are present. >> Thank you. And up first we have two public hearings. Um first is agenda bill 24694. A public hearing on the 2026 revenue projections including a 1% increase to the regular property tax levy.

This public hearing will provide a highle overview of anticipated general fund revenues for 2026. RCW84.55.120 requires a public hearing on revenue sources for the taxing district's following year's current expense budget.

The hearing must include consideration of possible increases to property tax revenues. The administration is proposing an increase property uh proposing to increase property taxes by the statutory allowed 1% for 2026.

The ordinance setting the 2026 property tax levy must be passed by the end of November to take effect for 2026. And here to present, I be handing it over to you, Mr. uh as Bjornson. >> Actually, Eric will be uh taking care of the revenue forecast uh for us this evening.

I'll pass it over to him. >> Thank you. >> Hi, Eric Johnson. So, uh, this presentation, uh, is focused on the general fund with context to the, uh, proposed 1% property tax increase. Starting out, we have an overview of our economic outlook.

Uh, in the top right graph shows a personal consumption expenditures, which is the preferred measure of inflation for the uh, for the uh, Federal Reserve. Um the gray bars show uh periods of uh of uh of recession.

Um and as you can see after COVID we had a large spike in inflation. Uh as a result the Federal Reserve increased the federal funds rate uh which had the intended cooling effect. As that came down, they started to decrease the uh federal funds rate uh which leveled out inflation and has given us this persistent inflation that we see today that is above the 2% targeted federal funds rate that is indicated by that red line in the top graph.

Moving over to the uh bottom left graph, we have the uh on the left hand side of the vertical bar are actual gross project uh product for values um for growth and on the right are the forecast values by the economic and revenue forecast council.

Uh so they are forecasting a decrease uh in grow the growth rate going into 2026. This is uh largely due to uncertainty as well as uh federal policies putting upward pressure on prices as well as uh signals of a softening labor market.

So jumping into sales tax, uh this is the largest single source of revenue in the general fund currently. Um so opposed to uh funding sources like uh property tax uh which is fairly stable during economic downturns uh the sales tax uh is subject to market fluctuations.

So as we can see here the dark line shows the percent change in sales tax uh periods year-over-year. So that would be September 25's change to September 24 and so on. Uh where we have uh when the line goes below that green line which is zero we have negative growth and when it goes above that is uh increased revenue or positive growth.

Uh during these recessions we do see that dip down. Of course, after COVID, we had a uh heated up economy and so that jumped up and then the effects of the interest rates uh brought that down dramatically to to the point where we're seeing uh the change in sales tax uh fluctuating or uh dipping above and below that uh green line.

uh which has resulted in really a flattening of revenue uh to the general fund from uh sales tax. Um but we are expected to meet targets uh and the increases that we do see uh in sales tax in the general fund are largely due to the redistribution of sales tax.

So that uh movement of the 8% coming from uh the radio and street funds uh that was done last year. So digging in a little bit deeper to sales tax uh on the right we have um the five major categories of revenue in uh our sales tax uh year to date.

So that's through September uh from 24 which is the shaded bars to 25 which are the solid bars. Uh so as we can see in the right hand donut chart here uh these five major categories make up about 50% of our sales tax in the general fund.

uh motor vehicle and parts dealers. We can see actually had an increase uh surprisingly, but that is uh primarily driven by the expiration of electric vehicle tax credits. Um so we did see a jump there.

On the other side, uh construction of buildings is down. Um this used to be uh the second to third highest grossing category. Um but as uh increased costs in materials and labor so inflation uh as well as borrowing costs uh which are the interest rates uh have increased um we've seen that go down and so we can drill in a little bit deeper to uh our local economic indicators of construction.

Um so the chart on the left uh shows year-to- date permit activity. Again that's through September. The dark bars are permits. Uh the light bars are number of units and the green line is the construction value associated with those permits.

Uh in 2021 um after COVID we did have a large surge in permit activity. Um after that going through 2024 you see that uh that activity started to decrease. And so this is really an indication of what's to come.

Um we did see that decrease uh translate to lower sales tax on that previous slide. Uh in 2025 we are seeing a uh jump back up in that construction value as well as the uh number of units. Uh so moving over to uh the slide on the right, we have a zoomedin look of the construction value that is uh separated by the uh pre and post rake heights rate heights of the um federal funds rate which is overlaid here.

Um we see that there is uh a correlation between the uh change in trend which is shown by those dotted lines whereas uh the federal funds rate increased uh there seemed to be a bit of cooling in our uh construction activity or our planned construction activity.

Um as those interest rates uh signaled uh a reduction, we saw some uh increase and we can continue to expect uh increased construction activity as interest rates continue to decrease. Moving on to housing, uh we have on the left uh the dark bar showing active listings.

Uh the orange bar is the uh latest period. So that would be September 2025. And then the other orange bar is the corresponding period a year before. So September 2024 and then the green line shows average listing price for and so and then again the dotted line is the five-year average active listing price.

And here we can see that uh active listings have actually been increasing. So, it's an indication that inventory is uh sitting around a little bit longer um resulting in uh the average listing price going down.

So, although the federal funds rate is not uh directly uh does not directly impact uh mortgage rates, it uh does have an indirect effect. Um so on the left or on the right side graph uh we have that average listing price uh zoomed out a little bit and we see that the trajectory was uh going up significantly pre- rate hike and then when those rates went up it was correlated with a cooling down of the market.

So again, while not directly impacting mortgages, we can expect that as the federal funds rate goes down that uh there would be um more activity. And then our last local economic indicator is labor. So on the left we have annual unemployment rate for the uh Bellingham metropolitan statistical area.

Um we can see that in 2020 there was a large spike in unemployment as uh there was a redu reduction in jobs from uh businesses uh shutting down. Um as those jobs came back there was a sharp decline or decrease in the uh unemployment rate um which started to level out.

Uh so in 2025 uh we do see that the unemployment rate has decreased and this is actually decreasing. Um so let's if we take a look at the uh charts on the right hand side of the annual number of jobs and civilian labor force and then the percent change below that uh where the red bar is the jobs and the yellow bar is uh labor force and these correspond to the above lines the graphs on the above or the lines on the above graph.

So we have a large decrease in uh labor force participation in 2025 which has brought down the unemployment rate and is another signal of a weakening job market. So uh for our 2024 revenue forecast in summary um assumes it assumes continued uncertainty which uh will weight our forecast lower uh and that is the forecast that the city's revenue model uh for sales tax and for sales tax and BNO tax follows.

Um then it also uh anticipates the property tax forecast of uh the council passing the 1% increase. So risks to the forecast um are sticky inflation giving way to upward pressure from tariffs and lower borrowing costs.

Uh continued weakening of the labor market and then political disruptions particularly in federal and funding uh and state funding. So with the recognition of uh limitations in growth to existing revenue sources uh the changes in the uh revenue includes uh a onetenth of 1% sales tax for public safety which is expected to bring in an additional $4 million to the general fund.

Uh it also includes a one-time repayment of $ 1.5 million uh for the design of the Watcom building. Um increases to util utility rates are anticipated to raise taxes tax revenue by an average of 7% and that does include the uh city's internal uh utility rates uh increasing on average of 13 a.5%.

Um, and then it also includes the continued temporary diversion of property tax from the fully funded pre-loff uh firefighters pension to the general fund to support increased public safety costs. So jumping into our uh forecasts uh the next couple slides you'll see uh that the dark blue line is uh sales tax or is tax revenue received and the yellow lines are the uh forecasted values.

Um so here on the left we see our sales tax revenue. There's a large growth from 20 to 21 which tapers off uh and actually starts to decrease in 2024. Then we see this large increase in 25. Again uh this is primarily due to the uh shifting of the distribution um of sales tax to the general fund.

And then our projected increase uh is also due to new revenue sources uh rather than uh growth of an existing source. Uh so on the right we uh show our performance of our sales tax model uh which uses the holt winters methodology.

Uh it's just a common time series uh forecast that uh includes trend and seasonality. Um so it follows the uh actuals pretty well but 2024 uh our model was slightly more optimistic uh than uh what we actually saw and revenues decreased uh more than expected.

Um however we are on target uh to what we project for 2026. And to explain this graph a little bit more, the yellow line is our weighted forecast and those uh thinner lines. So that green line on top is the upper confidence and uh the lower orange line is the lower confidence interval.

So moving on to uh business and occupation tax. Uh business occupation tax generally follows the uh same trajectory as sales tax. um they're highly correlated around 97%. Um you can see in the graph on the right that uh it does it is very similar to what we saw on that sales tax graph.

Um the donut chart on the left shows uh the difference in categories between sales tax and BNO tax uh which is largely um that BNO tax includes more uh service categories than sales tax does. So changes the distribution and includes a few other categories that aren't in sales tax.

Uh moving back over to the right, um we see this large jump from 24 to 25. Uh this is not from a redistribution of funding sources like sales tax. This is actually due to our BNO tax department being fully uh being uh fully uh staffed and um being able to work with delinquent filers to get them up to date.

So we've s seen a lot of revenues uh from earlier periods. Uh the forecast uh does uh decrease or does uh show a you a decrease um but it's only because we are uh projecting not to see as much revenue from those earlier periods.

Um it does have a uh 2-year compound annual growth rate from uh 2024 of 5.3%. So it is still really positive growth. It's just that uh 25 we are thinking is a bit of an outlier. Uh moving on to the utility tax forecast.

So this is made up of uh internal uh city utilities uh which are water, wastewater and storm and external utilities. Uh the external utilities are a little bit more dynamic uh and uh in forecasting um whereas our internal utilities we set the rates and they uh have typically um increased with inflation.

Um so on the graph to the uh right uh it shows the uh received revenue largely following that trend line going up with a few years where uh we've had uh fluctuations in those utility rates. So 2022 um largely driven by uh electric and gas, but there's also a uh unsuspected increase in the cable utility tax which has typically been decreasing over time.

Um 2025 has seen a year-to- date growth rate of 9.2%. Uh again, that is largely driven by uh electricity and uh natural gas. Um in 2026 we're expecting a 7.1% and again that is including that uh that internal utilities rate increase of an average on an average of 13 and a half%.

And so last uh we are looking at property tax forecasts which is the uh primary reason we are here. Um we can see that uh it increases at a pretty stable rate. There's a small fluctuation uh from uh changes in uh construction activity.

Uh in 2025, uh we see this shift uh up um and a continuation of that um trend line of that trend of that along that shift uh into 2026 from the uh diversion of the pension fund or pension levy funding to the general fund.

And what you can see with these two trend lines, the yellow dotted line on top and the blue dotted line on the bottom is that they are uh essentially parallel to each other. Uh this is uh to indicate that uh this really is just a shift in funding and not a change in the trend.

That trend generally increases about a 2% uh which includes that 1% uh increase to the budget levy plus uh new construction. So uh getting into uh our example of property tax, uh Washington uses a uh budgetbased property tax system as opposed to a millage rate.

Uh the three main components to a budget-based uh property tax is the assessed valuation, the budgeted levy which is what council sets uh as the amount that we can collect and then the levy rate uh which is the budgeted levy divided by the assessed valuation or AV uh per 1,000 uh dollars.

And so in our example here, we have uh a imaginary taxing district made up of two houses, a red house and a greenhouse with a total AV of $800,000. Uh the budget levy is $1,000. Uh so dividing the budget levy by that uh AV um divided by thousand gives us a levy rate of $125 per thousand of AV.

Um multiplying that by our individual uh houses assessed values, uh we get a tax bill for the red house of $437 and a tax bill for the greenhouse of $562 totaling that $1,000 set budgeted levy. So moving to uh year one uh where we assume uh the council of that taxing district passes the 1% levy.

We see that budget levy increase by $10 or 1%. Um the assessed valuation uh increases um so the red house increases $25,000, the greenhouse $75,000. a bit of a disproportional increase, but it totals up to uh an additional AV of uh 100,000 uh totaling 900,000 uh and giving us a levy rate of $112 per,000 of AV.

So uh because uh when these increase they have to fit into our budgeted levy uh they taxes will change by the proportional rate. Um we see the red house now has a lower tax bill of $421 and the green house has a uh increased tax bill of $589.

But uh the taxing district still only uh has an increase in their property tax of $10, which is that budgeted levy. So uh moving on to uh what we are seeing for 2026. Uh on the right we have our 2025 levy uh rates where uh we were seeing a $151 per uh thousand yeah a $151 per thousand uh AV um for 2026 we are expecting a uh $782,000 increase uh including uh the 1% increase and uh new construction.

This would uh lower slightly lower uh the uh levy rate to a $1.50 per thousand AV. Um and this would result in approximately a $22 increase to a $600,000 home. So the uh property tax distribution uh here we see uh the city of Bellingham receives about 18 and a.5% of uh the total property tax with the largest portions uh going to the Bellingham school district and state schools.

So within our uh city of Bellingham uh property tax, we have the general fund uh making up about nine and a half percent and the pension levy of about 1 and a half percent. Both of those uh going to the general fund and then our housing levy of about 2% and greenways uh is around 5%.

And uh last uh this chart um is been shown quite often lately. Uh the uh what we have on the area chart or the shared shaded areas is revenue. Uh the line depicts expenditures and the bars are revenues.

where the lighter shaded area is projected revenue. The orange line is projected expenditures and the different colors of uh the reserves are the different flavors of reserves and the uh light green um or shaded green boxes are the uh reserve deficit of the the emergency reserve deficit going forward.

So, this depicts um where we were at at the beginning of the budgeting process. Um in the general fund, uh there was approximately a $10 million uh gap that uh decreased our reserves going into 2027. After uh various rounds of uh budget discussions, um we're able to align our revenues and reserves and uh the emergency reserve deficit uh goes out farther.

Um however, still is nearly complete uh depleted in 2029. So we will need to uh look to change uh direction on that uh in the near future. And uh that's it. If there's any questions, I'm happy to answer them.

>> Any clarifying questions from the council before we open up the public hearing? Seeing none. Okay, we'll go ahead and open up the public hearing. And again, this uh is for to speak just to um the issue at hand.

Um general public comment will be later in the meeting. How many folks do we have signed up? >> We had two individuals signed up tonight. Uh first up was Adam Bellinger and then Brian Gas. Good evening, council.

My name is Adam Bellinger. Um, I just wanted to clarify with that presentation that um because I just received my 2026 tax assessor uh value of my house and it's showing that my house it went down in value by 4.1%.

And so, um, if we do have the tax increase, as I'm expected to pass tonight, um, could that mean that my house, uh, would my taxes would go down? And I'm kind of curious as to why that would happen. Um, and if they could the somebody could explain that to me.

Um, in general, I'm reluctant to uh uh be supportive of increasing taxes, but I have been willing in many instances um uh where I feel the trade-off is worth it. Um, you know, in response to this trade-off, I'd like to see better uh visibility in the use of funds.

Um, a couple areas where I could see uh uh would be helpful in making these kinds of decisions for us as taxpayers is one is departmental performance. um you know how are they doing at their at the jobs of of the of the people and then two uh particularly uh contract performance um um when I go I've done public records requests to to look at contract performances in the past um there's it's really easy to find the contracts and um and find out uh what the contracts are requiring but it's very challenging to actually find out uh what the uh performance has been on those contracts.

Um and there's been instances where I've seen where there's been just outright failures on that con those contracts. So, um I think um as a council um it's behooves you to understand not only are we getting funds requisition for the budget but then also what are the actual results at the end of the day and u because we need to be tracking that and I think there should be better reporting to the council for those things.

Thank you. >> Thank you Adam. Evening everybody. Um, my name is Brian Gas with live here in Bellingham. Um, when I'm thinking about the budget, I'm just curious as to, and it could be just a government thing.

The government never ever doesn't get maybe all that it wants, but there's never really any um accountability, let's say. It's always like, oh, raise taxes. Doesn't matter if you spent x number of dollars somewhere else and it's not working out or you are spending money in other places where I've complained about.

But just get more money. Raise taxes. Raise tax. My taxes. And I hate to be that guy. My dad I'm sure my dad was probably or every other person complains about taxes and what stuff costs. But I think my taxes right now are 36% higher than it was three years ago.

And I wish that people would just stop acting like uh that that they're just entitled to whatever dollar amount you guys ask for regardless of accountability, regardless of whether we're getting the the uh same um um service or product.

And it's not just Bellingham. I think our our state is the same way. Our county is the same way. And what ends up happening is you have these budgets like Bellingham's budget. I believe you guys' budget as far as I can tell 56% is for payroll costs right now of what the budget was 20 years ago or it was uh I think it was like 42% or something of the budget.

How is it that it's becoming an over and consuming issue that nobody ever ever has to get laid off or no hire from an employee is is too much and there's never a time when you can't get uh maybe more out of somebody like our I I complain about our permitting department but in reality you know I look at the permits like in 2010 I think they did like two or no 2007 right before the market crashed they were doing like 280 permits or something.

Now they're doing about 240 with and I with double the amount of people that are really supposed to be in that department. Yet the permit costs are more. Nobody cares. It's like this running joke that you just get, you know, the the dreams of people people's dreams are just laid with to waste at the feet of the planning department.

And there is no and the mayor will talk about, oh, we're going to do better on this when like what is the motivation for the city to really make permitting easier and really make it streamlined other than just talking about it in order for them to get their abomination of middle housing approved.

And I think that that's really what needs to be talked about when it comes to budgets is not always asking how much more can we get and just start appreciating the money that you got now and do better with it.

Thank you. Thank you, Brian. Is that everybody? Okay, we'll go ahead and close the public hearing and open it up to council. >> Council member Hamill. >> Yeah, I just wanted to clarify um one of the items that you brought up.

You had mentioned in one of the slides um sticky inflation giving way to upward pressure from tariffs and borrowing costs. Um, one of the questions that I have is not related to the local indicators of economic growth, but it's um to the broader um nationwide.

And what I'm talking about is um the the inverted yield curves on long-term bonds versus short-term bonds. And those are they they can be indicators of uh recession. And in the last eight recessions, the last one was May of 19 or May of 2019 and then it hit in March of 2020.

Um they they're they're really good predictors and I just want to understand what your perspective is on that and and noting that there's two false positives. There was one in late 1966 and a flat curve in 1998 um that that didn't result in a recession.

And so um I'm just trying to get a sense of those broader economic indicators aside from the the items that you had highlighted here tonight, which I appreciate. It's good presentation. Um but I just want to get a a sense of what that looks like.

>> Um yeah, thank you. uh the we were actually talking about an inverted yield curve even before COVID happened and and and then uh ever since we've had COVID and then we had the CARES Act, we had ARPA funding, we have we've gone through a really unusual economy and now uh with a lot of uh uncertainty now after all these waves of funds that have come through and we've went from a a zero basically federal funds rate up to uh 5% or all the way up and now it's just been slowly coming down.

Um it's been uh the the economic predictors that we've had in the past don't it's hard to tell what is um what to trust anymore. I guess in this unusual time uh they still are have been a prediction of uh an indicator that a recession is to come.

We've still been waiting for that recession. We've seen this flattening. We've seen um just unusual uh things within the economy that that haven't been se seen before, excuse me, when it comes to uh high high tariffs, high high inflation, um high federal funds rate.

So, um it is an indicator. Uh there's there's a lot of different things that that factor into that. The Federal Reserve is expected to bring that federal funds rate, maybe even one or two cuts to finish out the year to try to bring that down.

Um the curve has flattened a little more. Um I actually haven't seen the curve in a little while, but the the the near-term rates are higher than the uh the longer term rates. So we're still in that inversion.

Um but that could that could adjust in the future. We we don't predict a recession when it comes to these forecasts. We rely on what we've seen in the past and and use our confidence levels as you've seen.

Um and we I don't know that I'm answering your question because it's it's really hard to trust any of those indicators we've had in the past because we've haven't had a six years like we've had these last six years ever before in history um to try to figure out what's going on with the economy or um and the uncertainty at the federal level.

We've never seen that um uncertainty in in recent history as well. >> Council member, >> thank you and thank you for the presentation. Um so the instability one of the things that um I've been trying to grapple with is the um the employment sector because as we have higher unemployment obviously that's going to impact people's purchasing ability.

Uh do we have any uh data on um as far as like federally how many employees within not just Bellingham but the region because anybody working in the county and you know Scadget you know Bellingham may be a service hub.

I'm just kind of wondering um one with the um the government shutdown right now and they're being questioned whether or not they're going to back pay employees. um there's a certain amount that are um considered mandatory to work, but I'm just wondering, has there been any analysis of those type of impacts?

Um should there be increasing job loss in the federal government impacting um our local employment sector? >> Um we uh can you bring up the the slide of the um it was almost at the start. Um so here on the on the upper right um we see the that yellow line and the the thei the civilian labor force has actually been declining.

So those those people that are actually in the labor force there's less people that are actually in the labor force that's been declining almost since uh 2019 it looks like based on these graphs. And so jobs have come back, but there's actually been less people that have been interested in the jobs.

And so we've seen this shift um which indicates at the bottom right in that yellow that the the reduction in our unemployment rate is is primarily from uh individuals leaving the workforce rather than um seeking jobs.

So it's um this is local. It's it's um again We haven't seen, we've heard a lot of reductions in staffing, whether it be locally at at some of our other governments, and we haven't um we're still waiting to see how that impacts the economy um locally.

If you come across I don't expect the answer now but if you come across any data it'd be really I've been looking to um because you know whether it's government uh institutional or federal they tend to have benefits retirement and better wages and our economy here there's a lot of service sector which doesn't necessarily come with those fringe benefits and they're barely above minimum wage so I can understand where people are checking out of the job market.

um partially because those wages aren't where they're needed. So, I'm just more concerned about as um other institutions are laying off and then we also had the federal those tend to come in more at the living wage.

So if we come across any data, I know we have those numbers, but it'd be interesting to see which ones of those are at that higher economic employment level with benefits because I think that is going to have a more of a dramatic impact on um people's purchasing ability when we lose the living wage jobs in the community.

>> Member Hamill. Yeah, just it's more of a housekeeping clarifying uh question. So, under fis fiscal impact, it says the uh general fund revenues are uh 128549 and oftentimes or at least as I recall it under fiscal impact when we have this kind of presentation, it's what is the impact of the 1% increase uh for the regular property tax levy.

So, if we could have that number, that'd be be helpful. Yeah. So, the um the change the new uh the 1% plus new construction would be about 782,000. Um and then we've we've put the assessed value on the top.

So in 2025 levy the assessed value in Bellingham was about 22.9 billion that uh is estimated or what we've received from uh the county so far is that that's about 23.8 billion. So it's it's increased about a billion um in assessed value from 25 to and new construction was um 200 200 million or so.

Um, so this is the impact. We start with the 1% for each of those levies. We do not take the 1% on the affordable housing uh portion. Um, and so that stays that is sitting there at bank capacity, but we never assess the 1% on the affordable housing as that was uh put out to the voters to stay at the $4 million.

Um, and then we take the 1% plus new construction on the general fund, the greenways, and then on the fire pension levy. Other questions or comments from the council? Okay. And we are we are not being asked to uh pass a motion today.

Is that correct? >> We will bring the ordinance in the next uh council meeting. >> Okay. Fantastic. >> Okay. We will move on then to our next public hearing. >> All right. Thank you. >> This is agenda bill 24693, a public hearing on an ordinance relating to land use planning amending Bellingham Municipal Code Titles 20 and 21 regarding accessory dwelling units, otherwise known as ADUs.

The proposed code amendments are necess necessary to comply with Washington state law HB1337 regarding expanding housing options by easing barriers to the construction and use of accessory dwelling units.

Generally, the amendments remove owner occupancy requirements for ADUs, allow ADUs with all BMC 20.28 28 infill housing types. Eliminate the exemption from zoning density limits for ADUs. Eliminate floor area ratio exclusion exclusions for ADUs.

Eliminate development and design standards that are more restrictive than the than that applied to principal units. include nonsubstantive changes to code that improve clarity and understanding and remove provisions that are redundant or have no regulatory purpose and other changes as detailed in the attached draft ordinance.

The planning commission recommended approval with changes by a vote of 5 to zero. And will I be turning this over to you, Director Line? >> Yes, please. Good evening. Blake line, director of planning and community development.

Chris Cook gonna walk us through a little bit of the presentation tonight. But one of the comments that I wanted to make just ahead of uh his opportunity to do that is just to provide both the council and the general public an awareness of the fact that what we're going to do is we're going to go through a suite of different uh code amendments uh in the balance of this year.

So, we'll give you the uh opportunity to hear a little bit about the ADU portion tonight, take some public uh comment as well, and then we're going to, which is a little uh less typical, we're going to hold off if we uh on the third and final review till we get the opportunity to hear a couple of the other code amendments as well, the the middle housing piece and the design review component, and then batch them all together.

So certainly would like your comments and any thoughts you might have. Certainly want to hear from the public tonight, but um we're if we have if you feel comfortable, we can do first and second reading tonight, but otherwise we'll wait on third and final until we get the batch of those together.

So I'll turn it over to Chris. >> Right. Thank you, Blake. Uh good evening, city council members. So let's see here. this. There we go. So, again, we're going to be covering uh proposed amendments to the accessory dueling unit regulations to the city of Bellingham.

Uh some background really quick. In 2023, the state adopted House Bill 1337, uh which was to promote and encourage creation of ADUs. Um there's many requirements in that that are to be adopted at the local level and implemented.

The city followed uh immediately that year and adopted an ordinance amending its rules to be largely consistent with House Bill 1337 with some exceptions and I'll cover those in a little bit here. So what is being considered for update?

Um the update will fully implement the new state legislation in House Bill 1337 um by eliminating owner occupancy requirements citywide. Also improving regulations for accessory dwelling unit standards, permitting process and affordability.

Uh the process we're following is a type six legislative process. It requires a public hearing with the planning commission which uh occurred on October 9th. Um they produced uh findings, conclusions and recommendations to city council and the next step is tonight to hold a public hearing on those amendments and on the planning commission's recommendations.

Uh we're asking city council to hold uh first and second readings on this tonight and then as Blake explained over the next few months we will be coordinating these amendments with uh forthcoming amendments to middle housing and uh design review for streamlined and objective design review.

Those were again uh legislation by the state that we are to enact by year end. Sorry about that. So this is a really great chart here. Um it shows basically what happens when we reduce barriers in the form of development regulations for accessory dwelling units.

Uh the city adopted or permitted ADUs for the first time in 1995. They were only allowed in single family zones and they were limited to attached accessory dwelling units. In 2009, we amended the ADU ordinance and allowed detached ADUs for the first time, but they were only allowed in multif family zoned areas.

They were not allowed in single family zones. Um, so from 2009 through 2017, we were averaging around six ADUs a year. And in 2018, uh, de detached ADUs were allowed for the first time in single family zones.

and we got a immediate uptake in those and um averaged well into the 40s per year. In 2023, uh House Bill 1337 was adopted. City council amended the regulations to largely implement those those requirements and we got another big uptake of ADUs.

And with those regulations in um 2023, things that were required were um ADUs could be 1,000 square ft that increase from 800 ft² maximum size to 1,000 square ft. You were allowed uh two ADUs per property instead of just one.

Those ADUs could be attached or detached or any combination. So, uh it it really did um uh decrease barriers to the development of ADUs. So, some recommended changes uh in this ordinance again is to eliminate occupancy citywide for uh all zones.

Uh allow type one review process for minor modifications from ADU standards. We currently do this for infill toolkit housing for projects of one to four units. And so this would align ADUs up to two units to do the same thing.

Uh it would amend the ADU definitions again to align with allowance for middle housing per house bill 1110. So ADUs would be allowed with projects that consist of duplex, triplex, forplex and such. Those are again are required by House Bill 1110.

Uh the proposed changes would eliminate density exemptions for accessory dueling units again to align with allowance for middle housing in house bill 1110. Uh it would eliminate floor area ratio exemptions for ADUs.

It would provide allowance for ancillary space attached to detached ADUs. So, for example, um a property owner with a single family home wants to build a detached twocar garage and they want a detached ADU.

The ADU is limited to 1,000 square ft. You could combine that ADU with a garage. The ADU could still be 1,000 square feet, but you'd get additional allowance for that garage. And we've been hearing that a lot from developers and architects and such and property owners.

proposal would allow ADUs to be subdivided onto lots separate from the principal unit when deed restricted to provide affordable owner occupied housing. This would um allow housing providers such as Colian Community Land Trust to take advantage of this.

Uh the proposal also removes many design related provisions uh to allow coordination with House Bill 1110 for middle housing and House Bill 1293 for streamlined and objective design review. Lastly, the amendments they would amend and remove language as necessary to eliminate redundancy and improve clarity.

Now the planning commission reviewed the proposed amendments. They recommended approval with three changes. Uh first one was to eliminate the requirement for a joint agreement with the abuing property owner to reduce the setback for a detached ads in the rear 32 ft of a property.

Um so this would be allowed outright. Uh this is consistent with what's currently allowed for just standard detached accessory buildings such as garages, shops, and stuff like that. Um secondly, it would eliminate minimum parking requirements for a use.

Uh currently the ADU regulations, they still have parking requirements written into the code, but we are currently in this period with a interim parking ordinance that waves parking requirements citywide.

Uh we are working on um permanent parking changes amendments for parking in the city and until then um these parking standards still live in the ADU code. The planning commission looked at this and they saw that at least for accessory dueling units, it's a housing type that's appropriate to have no parking requirements.

So there the recommendation is to eliminate parking requirements for accessory dwelling units. Lastly, the planning commission recommended retaining the utility section uh and revised language in it to allow shared use of utilities between accessory dueling units and all infill housing types that ADUs are built with.

And staff is recommending against this one. We have looked at this um the utility section that was written purposely for when ADUs were allowed with single family homes and that's not too complicated.

But now that ADUs would be allowed with duplexes, triplexes, forplexes, that creates many scenarios where it may not be appropriate for shared utilities. And so, uh, our recommendation is just to, uh, follow the standard, uh, utility codes, not write something special for ADUs because there's too many scenarios.

Um, and we will continue to explore that and through policy work, we can look at scenarios where shared utilities can take place. So again, um, planning commission recommended approval of the amendments with these three changes.

Staff is recommending um, the planning commission recommendation with the first two, not the last change. That concludes my presentation. >> Okay. Thank you. Uh, anything any clarifying questions from the council before we open up the public hearing?

All right. How many names for this public hearing? >> We had two individuals signed up tonight. So, Adam Bellinger and Brian Gas. >> Good evening, council. My name is Adam Bellinger. Um I'm broadly supportive of the changes to the ADU ordinance.

Um however, I do disagree with the elimination of the parking requirements. Um parking man min minimums um should be looked at and adjusted accordingly but not entirely removed in my opinion. Um parking's difficult to get back once you eliminate it.

Um and uh parking is uh in my opinion a bit of a quality of life uh issue. Um if there is inadequate parking and an uh neighbor uh has um builds an ADU or u multiple neighbors build ADUs, uh it has an impact on the number of people there.

There are more cars going to be there. Um and as we grow as a city, we're going to get more cars. Um uh so um and I and I also think that ADUs were generally considered successful um because they haven't seem to show a lot of issues for neighbors but um and we didn't get a lot of resistance to them that we were maybe expecting when this ordinance uh or when we first started doing ADUs but um uh I think creating areas of friction could change that and I see that parking as one of Um, so I do recommend going with the original parking uh language as allowed in the state law.

It is a reduced burden uh but it's not just an outright reduction or elimination of parking requirements. Thank you. >> Thank you, Adam. >> Hello again. This is Brian from Bellingham Grind Gas. This is kind of a pet peeve of mine because I sell real estate and I don't know if any of you guys at the planning department or the city actually care what happens to people who own property already or when you say things like, "Oh, we're just going to we're going to eat.

We're just going to condimentize your backyard from your 500 foot ADU." That is not going to happen. Like it just isn't. And so you're you're kind of misleading people by saying that because nobody's going to buy something that has no yard, no parking.

Um, and you have to fight with your neighbor over shared utilities. Like I kind of feel like sometimes this stuff's not even really thought through very well. Especially the parking. I live my office is in a building that has no parking for my for the tenants and they're always coming into my spots or they're double parking and and what happens is you guys think in your head like, "Oh man, let's just get rid of parking because you think it's going to help, but you're just hoping that that person doesn't have a car or in need of a car or a friend that has a car or family that wants to come visit.

These are things that you need to understand." And when you start jamming people onto these small streets like like uh uh in the the the um you know in the Learded streets or in or in uh Colombia neighborhood, they're already parking on the the freaking off the road because they're too tight.

So you cannot just blatantly it just it's irresponsible to just blatantly get rid of parking as if it's just this thing that nobody cares about and that no there's not going to be any repercussions of some little kid who's going to get hit by a car because the cars are parking on both streets in court in uh Colombia.

Now I want to tell you this. I'm going to use your own words. I don't know if the city's even listening to what they what they're putting out. Your housing survey 87 of 87% of residents want to own their own home.

Your UG is basically coming up by eliminating all you're going to do all multif family. It's all 90% of your UG your whatever UG requirements are are going to be 90 90% multif family. And don't say middle housing is some special thing.

It's not. It's multif family rentals. That's all it is. You you buy a tree, you're going to put you're going to uh own a do a triplex and do ADUs with it on somebody's yard next to them on a 6,000 square foot lot in one of these houses.

You're going to create more enemies than you think you had before because I definitely am not going to have a a triplex with another set of ADUs on a triplex that that nobody can really own. And and you got to forget about the condom minimizing part of it.

just make condos because you're not gonna you're not going to get what you guys think. And I don't know if you say this so that that you're just telling people that you think in your head this is going to work, but I I'm I'm for ADUs.

I'll just wrap up. I'm 4 ADUs so the owners can get some revenue from their property to offset all the taxes that are going on. But to eliminate parking is just a it's a mistake and it's it's it's a it's unacceptable and it's bad it's bad policy.

Thank you. >> Thank you, Brian. Okay, we'll go ahead and close the public hearing and open it up to council. Council member Hamill. >> Yeah, I'm generally supportive of this. Um I do think that there are more questions that that could be asked and I'd like to refer this back to a committee uh during a daytime session at the next um regular city council meeting for those discussions that need to happen.

>> If that's a motion, I'll second it. Motion by council member Hamill and a second by council member Anderson. Further discussion on that motion. >> Council member Loquist. >> Um I'm going to support the motion, but I would like to ask some questions tonight after the motion.

>> Yeah, no problem. >> Okay. Any other question? Uh comments on the motion? Seeing none, all in favor say I. >> I. I. >> Any opposed or abstensions? That motion passes 70. Council member Loquist. >> Yeah.

On the condominium question, can you tell me uh was that portion to allow uh condom minimization required or favored by state law? >> It it is required by state law. >> So we don't have a choice but to allow it.

Um by the way, I do agree with the commenter. Um straight up old condominiums are great. I live in one. Um, so this isn't saying that our conomin conom minimization of of middle housing is not supposed to be a substitute for con minimization of condominiums.

Um, on on the ADU portion, I'm really glad you showed that graph. One of the things that concerns me a lot is I'm looking at ownership opportunities and when ownership opportunities are actually taken away by residents because they're outco competed by investors.

And so retaining the ownership um requirement as as one of the speakers said uh that means that the ADU would be a source of extra income for the owner as opposed to it would be an investment property and the entire thing would be uh that source of income.

Um Ron Davis who was part of the housing week I spoke to him about that. Um he unfortunately confirmed my opinion that when investor ownership comes into a housing market, it tends to to drive up because then higher housing prices for the investor are actually a source of revenue whereas higher housing prices for an owner are just higher mortgage costs.

So they have an opposite financial incentive investor owner versus resident owner. Um on the graph for the ADUs, um there was a concern that if we kept the owner occupancy requirement, it would be a drag on the creation of ADUs.

That drag apparently was non-existent because they doubled in number. I still think state policy is making a mistake by not paying attention to ownership because I think we need to keep ownership opportunities.

Um that's a comment on the ADU. So I I'm I'm I'm like the economy minimization option because it creates ownership opportunities and I don't like the removal of the ownership requirement because I think that takes away ownership opportunities.

Onomminiumization, as we'd mentioned, is uh a provision of the state law, but so too is the elimination of owner occupancy. No choice there either. >> Council member Cotton, >> I'm going to resist the urge to respond to that comment, council, but um just one clarifying question really for the public.

Um SB um I believe was is going to require us to eliminate parking mandates for any unit under 1,200 square f feet which would be all ADUs and um I just want to clarify that and in general I think it makes sense probably to align with requirements.

>> Yeah, there's a sequencing uh component to this. So you have the opportunity uh tonight or with this action in the future to um eliminate parking requirement as per this ordinance. Um as Chris alluded to, there is already the uh interim parking regulation reforms that supersede this.

So, um, having it in there would just be, uh, an unnecessary thing unless that interim ordinance, uh, did not get extended andor unless, uh, you know, we we go back into the provisions of the parking requirement to, but to your point, Council Cotton, the uh, Senate Bill 5184 does make that clarification that any unit under 1,200 square feet is not allowed to have a parking requirement associated with it.

That law doesn't go into effect until 20 January 2027. So, we would have essentially a year uh if if we chose not to extend the interim parking requirements and uh before that 5184 were to come into effect.

>> Thank you, Director. >> Member Anderson. Thank you. Um, there has been a lot of state laws that have come down and I I see a lot of this as kind of clean up to align with those state laws. But for community members who may not be as immersed in all these changes that have come through, even if some of them aren't enacted until 2027, a lot of times we're not we don't want to come back and clean up again in a year.

Could you just quickly cover um so I have a duplex, how many ADUs am I allowed to put on? Triplex, single family house, there's the detach, the AT, you know, attached, you can have one of each. I just think for anybody who's watching to understand as we go through to pass some of this, um it's aligning with the state law.

So is there just a quick summary of what we're going to be required to approve when it comes to the densification of how many ADUs come onto a lot. Yes. So with with what is being proposed is uh two ADUs would be allowed with each infill housing type.

Um infill housing you're allowed four units on a lot or six if at least two are affordable. Um what we are developing is uh with with the implementation of middle housing is that ADUs become infill housing types.

They are limited to those four to six units that are allowed on a lot. So whether you put a duplex on the property, you could have two ADUs, a triplex, you could have two ADUs, but at least one of the units would have to be affordable.

um forplex again then at least two units would have to be affordable >> to go up to six >> to go up to six. Yes. >> Thank you. Um just because of comments I just wanted to make sure there's clarification that having these additional and there will be things like how much square footage of property and stuff and we'll get into those details but we don't really have a choice in allowing whether you know uh no longer single family but like the the smaller zoning it's going to have the potential of development up to four living units and maybe six and it could be ADU or it could be a forplex.

So, um we're having to do this to comply to law. Just wanted to make sure that's clear >> to expand a little bit on the one option that we are uh prevent presenting to you all and it's not in the language for you tonight but um there was an interest in trying to retain some existing homes and especially properties with character and so we have uh worked into some of our language where we'll allow for that and there's an opportunity within that existing structure to demise that into additional units.

So, if you had an existing, let's say 1910 era home and you wanted to make that into a duplex, that additional yield within that home is not counted against that form as a as a way to incentivize the retention of that particular.

And just to clarify, that's something I've been supporting because I live in an old neighborhood and we want to de sense, you know, basically incentivize retaining the old housing by adaptive reuse and not punishing um by having a tear down so that they could maximize the property.

So, um if anybody hates that, that's on me. Those are conversations we've been having for a couple of years. Council member Stone. >> So either this evening or I guess if this is going to be referred back to committee for further discussion.

Um I just like some further information about the utilities right discussion and what's being proposed. Um, and I understand that staff's not supportive of, but it's unclear to me how if utilities, um, could be per lot, like everything on one property is the same and then the residents on that property have to figure out how to divide it up, right?

And the city only has one utility user or if we're within the code, then each unit is tracked separately. So under the under the current uh way that it's written, if you have the the principal unit on the property and then you have water service for example to that unit, then you can extend that line back to an ADU or in fact two ADUs with the owner occupancy.

It was part of the component that there was kind of a the property owner residing there whether they resided in the principal unit or the ADU itself. you could have that shared utility service as Chris was alluding to and as council member Hansen just brought up kind of with the proliferation of options that exist now today whether that's taking that existing home and making multiple units out of it putting uh middle housing forms on that lot or ADUs now you have the potential also with the condominiumization of those that you may have multiple owners that are on a particular ular property because of the wide range of opportunities that exist.

One of the things that we've been talking through from the planning side of things with our public works colleagues is how do we manage that billing the utility provisions all of those various different components having it written in the ADU section in our opinion um doesn't really give you the broader conversation overall.

So by taking the utility portion and just looking at that in the section of the BMC regardless of what housing form or housing type you get, you go to this section and you look at the utility these utility components rather than going into each subvariant of the code and trying to figure out what the requirements are.

So, it was our recommendation from an operations and implementation perspective to pull that out of the actual ADU code and just say, "Okay, here's your lot. Let's talk about what type of residential capacity you want on that and then you'll go to one reference of code depending on what your choices are and the these are the regulations that apply in that." So it it pulled the two apart a little bit just so that we weren't trying to anticipate every scenario in the ADU code portion.

>> You follow just and that makes perfect sense to me. I mean that then the utility section would be separate and that's where you would reference with are you able to speak to within that utility section then wherever it lives whether shared utilities is still an option or not?

Yeah. And that again that would give us the opportunity to amend that utility section of the code regardless of what housing forms uh you may choose to provide. And given the fact that there are so many choices for uh you know individual ownership models or variations thereof.

>> Okay. Council member has a followup to that. >> Yes. So, here's what I want for utilities, and you tell me whether or not this is where you're going. Um, I think separate utilities is the easiest and cleanest way.

It's kind of, I would think, the default, and that the shared option was a peculiarity because of how we were conceiving the ADUs, but the language was permissive. It didn't require people to share utilities.

So, what I would like is a code, a utility code. I separating it sounds good, where you could share them if you want to, but you could have them separate if you want to. My guess is in most cases except if you don't want to pay the upfront cost separate utilities is easy, neat, clean and better.

But in few situations you might just want to extend existing service. So I think that our utility code should say both of those are fine. You may create a headache for yourself but it's your choice. Are we going sort of in that direction >> generally?

>> Okay. How not? I think one of the things that we're we're learning with as we're going through and doing more research on the middle housing is just all the different options. Um we are also trying to write the code to encourage home ownership opportunities.

So wherever we can we're we're allowing um the the four units that will be allowed excuse me on on the site to be subdivided um regardless of minimum lot widths and things like that. So if you've got four units then let's not worry about minimum lot size.

let's just go ahead and let land um be chopped up however the units are put on that on that site. So, as we continue these discussions of implementing the middle housing bill, the ADU bill, we've been having a lot of conversations with both um our public works department about utilities, um we've also been talking to uh sanitary service company um when it comes to trash and and recycling bins and what that means, how many do they need per every type of unit.

So, um, currently if you have a single family house that has two ADUs, as as Blake was mentioning, you can share those utilities. If you go to that duplex or that triplex, um, what we heard from um, some members on the planning commission is that they want to make it as easy as possible and as cheap as possible to build housing.

what they weren't really um I wouldn't say didn't dominate their conversation was the the billing perspective and and how they go about billing. Um it works for some agencies where you've got that that condo um and you've got a group that's paying for that.

Um when you don't it may not. So we will continue to explore every option um in that helps us from a building standpoint and also from affordability standpoint because we understand the need. That's what I guess I was saying is that um maybe we don't need to decide for the property owner about shared utilities or split.

I see a headache with shared but maybe it's not a headache for them. I see an advantage to splitting the utilities but maybe it's an extra cost to them. maybe we don't really care about that as long as they know what headache they're buying.

>> And I think the other part I'll add is um with the new provisions of the um disclosures from a rental perspective, you have to identify the utility components up front. So in in the rental context that that protection if you will is already there.

And so then this opportunity looks if you're trying to do ownership as Kurt was describing. So there opportunity for both and I think protections for those that that may need them. >> Council member Cot.

>> So I'm thinking about the AD, you know, your perspective homeowner developer that we're used to thinking about an ADU in their backyard and how these utility provisions have been very helpful. Um why um in in terms of like repealing and then replacing versus replacing and then repealing?

I guess um is there Yeah, just to think about the afford affordability of um benefits of these provisions and if it makes sense to keep them in until we've have a fully fleshed out um new um way to think about this.

that option certainly exists. Um I think that what we're trying to do is to um and I appreciate we're putting you at a a little bit of a disadvantage in that we're trying to line up the ADUs and the infill stuff and make sure that we're in compliance all of that by the end of the calendar year to be consistent with state law.

um knowing that as Kurt described, we're continually having those conversations with SSC and we're the utility providers in some respects and so it's all trying to just make it uh collectively work together.

>> Council member Anderson, >> thank you. um for our next meeting. I um a couple items that I would like to have a little bit more information so I have better understanding um when it comes to um whether it's retrofitting an old house or if it's adding a detached and attached ADU or more green field.

I'm a developer and I'm going to build this to the maximum. I'd like to have more information on what kind of impact fees, where they apply, when they apply, and you know, where the where they're not going to because I'm assuming there's multiple scenarios.

So, I'd like more information on that because I I think when it comes to utilities, that might have a little bearing on, you know, as far as like if water meters, if you're going to have separate water meters, then there might be impact fees for that versus having it run through my house itself and then splitting the cost.

Um, so a little more understanding on that. And then um the envelope because some of these changes I worked on the first I mean not way back when but more recent history the ADU and we spent a lot of time on setback and some of the state changes um but also the lot size like um one of the conversations I had with someone is that they were almost going to infinite like well if you do the condominiumization and then that that new house that is owned separately Can they then build two ADUs?

I'm like, eventually you run out of room. I mean, unless you live somewhere on acreage. So, which you probably wouldn't do a condo. If you're going to do that, you would divide your lot. But there is a point where the envelope I'd like more information on how much green space, how much yardage, um, you know, line set back if there is any at this point.

Um, one of the things that we worked a lot on was ensuring as far as height standards, um, so that you didn't shade out someone's garden, you didn't shade out their solar panels. And so I don't have like a visual of, you know, your average, you know, 24 foot pitched roof, what can be right next to them on that lot line?

and is it going to impact things like their investment on solar? So, I don't know if there's a graphic or like just something that could be pencled out so I can see what that envelope would look like if your average like this is a square footage the minimum amount that could you know to develop on and this is what it would look like if you built it.

just so that we know um things like um you know if somebody has tandem parking or is there going to be any place you could set up a swing set for a kid or protect you know a heritage tree visually it would be really wonderful to have an idea of what this might look like on an average lot that is allowed.

>> I will we'll do just a quick response to that. It is um with all of the the new options that people have for their properties now with u between middle housing and the ADUs, it is very challenging to do what you've asked because there's just so many different options now.

Um and it's almost when people come to talk to us about what they can do with their property, it's almost what can't you do with your property? Um and that's good and and a little scary for all of us, right?

Um it's it's great from a housing productivity um perspective, but um that change can be um a little scary for some of us because going from that one to four. So we will definitely put together some something that will elaborate that.

Um just generally it depends on what you're building and then all of those standards comply with that that house that form. Yeah, I guess for me it's, you know, like a New York neighborhood, a lot of the lots are 3,000 square feet or 32 34 um,000 square feet.

Um, and if you have a house that's taking 40% of that lot, you could build basically one ADU or convert the garage, but they're very tiny yards. So within that, is there a required amount of land that is still supposed to be undeveloped in our smaller density neighborhoods?

And if not, can it just go the full envelope by right and leave nothing, you know, green or yard or, you know, because then I start worrying about storm runoff and impervious surface and things like that.

So, um I don't have a a quite understanding of where the minimum amount of non-developed space is still going to be required. >> And we'll bring that back for you. The um just for frame of reference of what's in this.

So, um the existing building envelope for the you know kind of the um the zoning that's there now doesn't change. So, in many cases when you're talking about uh using the vernacular that's out there today, the single family zoning, you have um setback requirements that are still applicable.

You have the height uh of 35 ft that's allowable. You have a certain amount of lot coverage. And we can walk you through all of those variables. What this uh provision does is what when you allow for the ADUs then to go on the lot, those things still apply.

If the ADU is attached, it is allowed the same height as the as the principal unit. If it's detached, then the state law comes in and has changed that height allowance to 24 feet. What is also then provided up in here and this is what you see in the first bullet point up on the screen there is that in the rear uh 32 feet of the property we have allowed under the existing code for that accessory structure to go up to the property line with the neighbor's agreement.

So then the question becomes, okay, does the neighbor then have a veto right associated with that to prevent or preclude some of So what this would do is um allow it outright and allow for that accommodation.

There are still other provisions and this I think gets to your point of wanting to see how all this stuff lines up. If you choose to build up to the property line, building code requirements still apply and so you can't have you have to have a fire rated wall.

You can't have any penetrations, operable windows, doors of that nature. So there are variables that come along with those. So in many cases, if that's your design preference is to have those things, then you're going to be five feet off of the off of the setback as well.

Off the property line, excuse me. That helps because when one thing says you could go to the envelope and I'm thinking the five foot setback because of another building structure. I didn't know what would supersede.

>> Thank you. >> But still still >> yeah there's like Kurt said we'll bring a a range of different things for you to to work through. For me, it would be I don't want to say worst case scenario because that's the wrong tone, but like smaller lot, that type of situation.

I don't need to know what would happen on a 20,000 square foot lot because that could maximize all opportunity because there's space. but a more the established dense neighborhoods is more. >> And one of the things that you'll see in tonight's in this ordinance before you is uh and that's partly why we went through the direction of adding ADUs to that middle housing type because then that introduces the floor area ratios that are applicable based on that and provides some mass and bulk uh you know regulations associated with that.

um and and gets us to the same uh unit count, whether that's the four or the six, depending on how you're doing it. Um those would count with that as opposed to going uh and and and eliminating that requirement and not and having that density count as a zero effectively.

>> Council member Stone and then Cotton. So just a quick clarification I guess about the the ordinance before us because my understanding is that you know the purpose of this ordinance and the the hearing is obviously a part of the um the process but the ordinance itself is to implement House Bill 1337 and to bring the city into compliance with right recently passed House and Senate bills.

And so I appreciate the, you know, the conversation and wanting to get into, you know, maybe greater detail to have clarity for ourselves and the community about what does this actually look like. Um, but I just want to be clear about within the ordinance, if there are pieces aside from the planning commission recommendations, which obviously may fall outside of that, but if there are other pieces that aren't parts of the ordinance that are not required under state law, because otherwise, I mean, I feel like there's pretty clear direction about us needing to be in compliance with state law.

Um, so I just want to be clear on, you know, where there is any wiggle room, if any. The three items that you see on the screen uh there are all within our own purview. Um parking has the probably is the closest like we were talking about before where state law may um supersede some of the requirements but we do have the ability to talk about the um 32 you know the reduced setback in the 32 uh rear feet of the property.

We do have the ability to work through our own utility provisions. So those wouldn't be subject to state law per se unless there's something else I'm misremembering. >> No, there's just other uh relating to design standards and stuff like that that if they are more restrictive than what's required of the single family home, we can't do that.

So this is really setting this up so that we can um tailor our design objective design standards and streamline process so that those design standards apply to all the housing and we don't have separate ones for ADUs infill housing and such.

So, >> mut am I also right that um I mean thinking that the F um getting rid of that exemption and the allowing the fee simple for affordable units is also that that's new in our our own initiative as well >> allowing the um ADUs to count towards uh uh or have the density exemption taken away.

Yeah. Is a local provision that we would um allow for and accommodate. Um so that's that's certainly a component of it. The second part of your question was >> fe simple for affordable. >> Oh yeah, fe simple.

So we this gets back to a little bit of um wanting to provide the ownership opportunity and in particular an affordable ownership opportunity. So, when you get to that fifth and the sixth, if you wanted to make those uh an opportunity where you're where you're actually uh parceling them off and creating a standalone lot, we wanted really that to be an incentive towards the affordable ownership component.

>> So, obviously I feel like we talk about this forever, but I'm just wondering if it's useful for staff for us to still do a first and second tonight knowing we'll do a work session between four, third, and final or just skip it.

I think I think it's your prerogative. I mean, I don't know if Allan has >> I would just say it's easier if you think you might make additional changes to hold off and do it in a first and second. >> Okay.

So, we had a motion to move this to committee. So, this conversation will cons uh continue at committee. But anything to wrap it up for tonight before we move on. All right. See nothing. Um, thank you so much for the presentation and the discussion.

We can now move on uh to mayor's report and the mayor is with us online. So, >> good evening council. Can you hear me? Okay. >> Good evening, Mayor. We can hear you. Yes. Great. I've been following along here at home tonight.

Um, I have an appointment for the arts commission and this is for council's approvement and I'm seeking to appoint Adonia Karens to a first full term. >> Approval. Second. >> Motion by council member Liiloquist and a second by council member Hamill.

Further discussion? Seeing none, all in favor say I. >> I. >> Any opposed or abstensions? That passes 70. Thank you. Next, I just wanted to comment and thank our community for turning out and showing our best side on Saturday during the No Kings Rally at Maritime Heritage Park.

Council member Dan Hamill, Deputy Keller, and I monitored the rally from alongside Bellingham Police leadership at the Incident Command Center. And it was a peaceful gathering throughout the day with great costumes, music, dancing, and certainly powerful words in support of our democracy.

I wanted to touch on the fact that the city council heard an overview of the final chapters of the draft Bellingham plans this afternoon, including the new section on community well-being and civic practices.

This chapter recognizes and amplifies equity, belonging, and community engagement work that has been underway for years while also expanding these values and priorities citywide in meaningful new ways.

My office was deeply involved in shaping this chapter and it is a and its many commitments to the values that we all share. These commitments represent exciting new steps forward along with our intentions that these policies come to life in the years ahead through our leadership.

I encourage the community to learn more at our engage Bellingham site located at engagebellingham.org. I wanted to also highlight a little bit about uh one of our goals around tribal relations and how we are actively turning words into actions.

Our engagement with our tribal neighbors continues from earlier commitments we made and continue to strive forward on. Staff and leaders visited the Lemmy nation three times just last week. first to celebrate indigenous people's day to collaborate on natural resources issues and also to support safe housing for tribal members and their children affected by domestic violence.

We are grateful for these opportunities to engage with our tribal neighbors. And last but not least, I'll just say I'm deeply grateful to the Mariners for some thrilling October moments and it's been one heck of a ride.

And that's the end of Mayor's report tonight. >> Thank you, mayor. I'm glad you could join us. Okay. And next up, we have our committee reports. Uh we start first with committee of the whole chaired by myself.

All council members were present today. First up, which was the budget work session this morning, agenda bill 24705. Uh budget work sessions sessions are an opportunity for city council to learn more details about specific department budgets.

In this session, staff presented the proposed budgets of the information technology services department and the Bellingham Public Library. The 2026 proposed budget can be viewed at co.orgbudget. And uh just a couple highlights from IT.

Um of course uh it is focused on sustaining core support and infrastructure and software services. Uh there were some position eliminations uh proposed eliminating the chief information security officer position, eliminating the project manager and database administrator position.

eliminating part-time network consultant position. Um yeah, uh those were those were the major points of u budget reductions there. Um for library, we've got uh elimination of four vacant positions uh equating to 3.25 25 FTE, including outreach specialist 2, branch specialist three, public services clerk, and library assistant.

Um, it's proposed to also reduce the library's open hours. Um, the library will operate six days a week, closing on Sundays. Sundays are half days, just three hours a day. It's the most efficient day to close.

Um, also one of the um the the slower days of the week. Um the we the city will still have a $2 million investment through REIT funding for the next phase of the central library renovation. That's the the top floor and the bottom floor where the children's library is.

Um and again that that is not general fund funding. That is REIT funding real estate excise tax. Um, and so there will also be a 13% reduction in library materials budget. Um, which equates to about $90,000.

And some points that our library director Rebecca Jud brought up that I thought were interesting and wanted to share with the public. From January to September 2025, Bellingham uh public library circulated 1.4 4 million items, print and digital, and welcomed a little over uh 360,000 visitors to the library's four locations.

On average, one in four Bellingham residents across all ages used their Bellingham Public Library card in the past three months. And over the past three years, one in two or 55% of Bellingham residents have used their library card.

Good job, Bellingham. Uh the budget proposal preserves the library's high level of programming for Bellingham youth. For example, the library will continue to offer 17 story times um per week during the fall, winter, and spring and summertime summer storytime sessions.

I have attended many of those and they are wonderful. Uh two of those story times are now bilingual offered in Spanish and English. The library plays an important role in our community in promoting digital access and digital literacy.

The 2026 budget proposal preserves access to the library cir 74 circulating high-speed hotspots. The circulating hotspot collection was started in the fall of 2020 and has been in continual use for uh the last five years.

So very very popular program helping folks um e access the internet with hotspots and um director Jud mentioned that for every one hotspot that is checked out there is one person waiting to check one out.

So um our library and its programs are very well used. Okay. Um uh today we removed an agenda item um regarding the appropriation department. That item has will be um rescheduled for a later date. Next up we had agenda bill 24697.

That was the Bellingham plan chapters 7 to 10. The Bellingham plan the city's comprehensive plan for growth is under city council review with a required adoption date by the end of the year. An overview was provided on October 6th and the first six chapters were discussed on October 13th today.

The final four will be or no the final four will be cover were covered today. Staff uh provided an overview of the chapters and the city council is invited to provide feedback to staff regarding those chapters in anticipation of the upcoming public hearing and plan adoption.

Um, great presentation today, uh, from planning staff who've worked very hard to put this, uh, this plan together. Um, I would highly suggest reviewing that video again at meetings.cco.org and um, as well as just reviewing the draft copy of the Bellingham plan um, at engagebellingham.org.

Um and with that, old and new business tonight. Okay, seeing none, we next went to executive session and we have we had two items. First was a labor relations matter with Danner. Um we discussed collective bargaining strategy.

Staff provided information on a labor relations matter for information and discussion. No action was taken. And up next we had potential litigation matter with CRA and Chaplain. Staff provided information on a potential litigation matter.

I will now entertain a motion authorizing the mayor to sign in sign onto an amicus brief in United States States v. Newark at all. That's nec number uh 225-CV-0581 DNJ. >> Move approval. >> Second. Motion by council member Anderson and a second by council member Stone.

Any further discussion? Seeing none, all in favor say I. >> I. Any opposed or abstensions? That passes 70. And up next this afternoon we had public works and natural resources and that was chaired by council member Stone.

>> Thank you very much. This afternoon I was joined on the public works and natural resources committee by council members Anderson and Cotton. We had two items before us this afternoon. The first was agenda bill 24695.

This is an ordinance regarding the establishment and operation of a Bellingham mitigation bank. The city of Bellingham is actively developing a new wetland mitigation bank. The goals of the new mitigation bank are to improve the ecological success of mitigation projects, achieve regional restoration goals, address temporal loss of aquatic resource functions, address the mitigation needs of public and private entities, and streamline the mitigation process.

The regulatory process for bank approval is nearing completion, and the city is preparing for bank opening in the next 18 months. The proposed Bellingham Mitigation Bank ordinance establishes the framework for operating the bank and creates a new special revenue fund for acquiring, establishing, constructing, operating, monitoring, maintaining, and managing the Bellingham Mitigation Bank.

So, we were joined this afternoon by Annalise Burns, acting public works assistant director for natural resources. Um and wanting to note that within the um just outline of the process. So this afternoon considering the mitigation bank ordinance um the next step we're expecting to be in approximately 18 months um would be regarding the mitigation banking instrument and hopefully signage um signitories to that by the bank sponsor which will be the city of Bellingham as well as the Washington department of ecology, the US Army Corps of Engineers and Watcom County as the local regulatory agency.

So again, looking at that to be coming forward um in late next year, 2026 or early 2027. Um we're just waiting on the finalization of that. Acknowledging that this process is a long the creation of the bank, a very long process.

So five to 10 years. I'm looking at close to to 10 years as we near completion. Um after that point when the um MBI the mitigation banking instrument is signed just to highlight a couple of the um logistical pieces of the the bank itself.

So looking at the creation of a finance committee which will establish the credit pricing um for the the bank and the sale of those credits as well as a review committee um which will be tasked with review of applications.

So in this particular case it's a bit unique where the bank will have a limited number of credits and we expect that the demand will be higher than the number of credits available. So that review committee will be reviewing applications um and the ordinance outlines as well um just the prioritization of of projects that would be um considered for um for approval of credits.

And so as we look at this exciting milestone in the process, there was a unanimous motion by the committee this afternoon to move to approve the ordinance and I so move. >> Second motion by the chair and a second by council member Anderson.

Any further discussion? >> Seeing none, all in favor say I. >> I. Any opposed or abstensions? That passes 70. Thank you very much. The next item before the committee was agenda bill 24696. So, this is a joint resolution of the Bellingham City Council, Watcom County Council, and the Lake Watcom Water and Sewer District Board of Commissioners adopting the Lake Watcom Invasive Freshwater Muscle Rapid and Extended Response Plan.

We need a good acronym for that long title. Hopefully coming soon. Um the city in collaboration with Watcom County, Lake Wacom Water and Sewer District and other partners has developed the Lake Watcom invasive freshwater muscle rapid and extended response plan.

This plan outlines the strategies and actions required for efficient and effective response to any detection of quaga, zebra or golden muscles in Lake Wacom. These invasive freshwater muscles have been detected in nearby states and pose a significant threat to drinking water infrastructure, water quality, and the aquatic ecosystem and recreational activities in Lake Watcom.

The purpose of the plan is to support rapid coordinated decisions to eradicate invasive freshwater muscles if they're detected in Lake Watcom, thereby protecting the community's ability to deliver clean, safe, and highquality drinking water at a responsible cost and safeguarding Lake Watcom ecological integrity.

Staff and consultants presented the plan and a proposed joint resolution um which would adopt the plan. So that was presented this afternoon. We were joined by Mike Oling Iner, deputy public works director as well as Mike Perilskin who's the superintendent for natural resources field operations um and also um Mark Chickeny Chickeny Beaver um who is the um consultant with four peaks environmental science and data solutions.

So the presentation um from Mark what we were looking at is really a unique situation that the the city is in and has undertaken I'm thinking about three areas of focus one being prevention. So hoping that we do not detect um any of these invasive u muscles in in Lake Watcom.

So, a lot of that's happening through permitting as well as the installation of gates at boat launches to the lake. Um, staffing and inspection at those points of entry into the lake. Um, and sheriff patrols actually on the lake to ensure that um, boats on the lake have been inspected and have the required permits.

That's followed up by continued monitoring um and testing of the lake in order to um make sure that if there is a detection, we have prompt um a prompt alert to that. And so the third piece would be the response.

And this plan really looks at what that contingency plan is in response to a detection on the lake. And this is the first in Washington state which is locally led as well as sight specific. so focused on Lake Watcom um specifically and certainly that contingency plan needing to be in place at this time with the prevalence as we've said of these muscles being detected in neighboring and close proximity to states um such as Idaho and and California.

Um and so this afternoon there was a unanimous motion to approve the resolution and I so move >> second >> motion by the chair and a second by council member Williams. Any further discussion? Seeing none, all in favor say I.

>> I. >> Any opposed or abstensions? The passes 70. >> Thank you very much. That was the end of committee and I'll send it back to you. >> Thank you, Council Member Stone. Up next, we have consent agenda >> to approve.

>> Second. >> Motion by Council Member Hamill, second by Council Member Williams. Any further discussion? Seeing none, all in favor say I. I. Any opposed or abstensions? That passes 70. Final consideration of ordinances.

Agenda Bill 24685, an ordinance creating a new fund to account for the renovation of the central library facility and amending the 2025 budget. Amendment number two. >> Move. >> Second. >> Motion by council member Hamill.

Second by council member Williams. Any further discussion? Roll call, please. >> Hannah Stone. >> I. >> Dan Hamill. >> Hi. >> Skip Williams. >> I. >> Lisa Anderson. >> Hi. >> Michael Liiloquist. >> Hi.

>> Jace Cotton. >> Hi. Holly Huffman. >> I motion passes 70. >> Thank you. Okay. Well, that concludes the regular business of the meeting. We will now move to the public comment session. If you're watching live online or on BTV, the broadcast will now end.

However, you can continue watching via Zoom at co.orgccoom org/cczoom or listen via phone by dialing 253-2158782 and entering meeting ID 896-98012044 and password 9. Again, that's cub.org/cczoom or dial 2532158782 and enter meeting ID 896-9801-2044 and password 9 to continue to watch or listen live.

I'm going to have nightmares about those numbers one of these days. If you are watch if you are watching a recorded version of this meeting, you can view public comment videos at co.org/ccub comment. [Music]