City Council - Committee Of The Whole

go ahead and get started we're down a couple of council members but they should be here any minute and the first item is for information and discussion only so we should be just fine um we'll go ahead and begin to respect everyone's time the first item is an ordinance amending Bellingham Municipal Code chapter 17.10 to adopt by reference the 2021 additions of the Washington State Building Code the State Building Code act chapter 19.27% W requires local jurisdictions to adopt the 2021 edition of the Washington State Building Code by March 15th 2024 these updated codes establish minimum building mechanical fire plumbing and Energy Efficiency standards the city council reviewed the 2021 codes in May 2023 however the State Building Code Council delayed implementation due to several legal challenges which have since been addressed Council must adopt the revised 2021 building codes to ensure compliance with state laws here to take us through is um Sean engley uh building official good afternoon Council one of today's agenda items on discussion is the adoption of the 21 building codes I'm going to give a brief explanation of the delay from last year and touch on some recent impacts uh to another code series these codes are National codes that are updated every 3 years and further refined by the state of Washington and the State Building Code Council local jurisdictions are required to adopt these State codes per state law these codes provide regulations for all aspects of

construction including structural Plumbing mechanical electrical and Energy Efficiency previously Bellingham Council voted on uh to adopt the 21 codes on May 23rd 2023 however on May 24th 2023 the State Building Code Council held a special meeting to discuss a recent US court of appeals case this case arose from the ninth Circuit Court ruling that found the city of Berkeley's energy code violated Federal preemption over State rules the new law site the new lawsuit was also filed against Washington State codes for a similar violation a new law excuse me in this lawsuit several parties sought to prevent the enforcement of the Washington State energy code's ban on natural gas appliances these appliances are regulated under the federal energy policy and conservation act otherwise known as EPA at this State Building Code council meeting it was decided to proactively revise the new energy codes hence the delay and to ensure there was compliance with the federal law regarding EPA this resulted in a fossil fuel pathway allowing for the use of gas appliances so the 2021 code now is in compliance with the EPA ruling that basically caps the the delay now I'm going to go on to a further kind of um contentious portion of the S code series and this has to do with the wooi code another continuing issue with the building codes is the application of the international Wildland and urban interface code otherwise known as the wooi this code adds fire protection standards to all structures based

on the proximity to Wildland and undeveloped Wildland vet including vegetative fuels basically reducing the risk of wildfires spreading from Wildland to urban areas within Washington's version there were several guidelines that were unclear or open to interpretation to help jurisdictions clarify code application the state legislature recently passed Senate Bill 6120 last month the bill directs the Department of Natural Resources to revise these Statewide maps and stipulates which portions of the of the um muoi the State Building Code Council can adopt this work is estimated to take DNR approximately a year and a half to which then Bellingham can begin to enforce to recap the 2021 code changes includes not only compliance with us court of appeals decision but many other code updates some of which are mentioned within your packet uh within your memo packet these include increased efficiencies in residential construction increased numbers of EV charging stations depending on occupancy classification of the building updated new requirements for all gender toilet facilities and new extension opportunities for expiring permit applications in conclusion Bellingham must adopt the 2021 codes based on state law and staff does recommend you adopt these this ordinate found count sorry staff does recommend you pass the ordinance found in the council packet and I am here to answer any questions you might have have committee marstone so I just had one point of clarification actually for the

City attorney so we previously voted on this item right first and second um back in you said May of 202 um3 and so is this technically third and final is one question Andor does this need to be an emergency to go into effect immediately because I know the March 15th date obviously with 15 days to take effect within our code that would be beyond that date and so I wasn't sure if we remained in compliance just by taking a vote today in time for that March 15th deadline or if further action was required um this is on for third and final as is the fire code um so uh we are asking for third and final on both ordinances um the March 15th date is a state deadline um and we will my understanding is that the staff will be applying the new code starting March 15th technically for the city it would be 15 days after third and final but we're required to apply this state code regardless of whether we adopt it or not so the effective date will be March 15 any further questions go ahead I guess I'm I want to make sure understand exactly what happened with the um energy code which Bellingham went forward with to disfavor natural gas for building Heating and for water heating and then State took action to update the Statewide codes and so it preempted ours but that was fine because it had the same outcome as our own but now we're adopting the state code but the state code has or has not been backed off of that original intention backed off of it in delay until there the the um the court makes

a ruling so in a sense whatever we passed is now at least is undone or is suspended right yes so our we're basically repealing our Bellingham energy code and adopting the state code which has been revised to mitigate any any um any uh non-compliance with the EPA ruling that Berkeley um ber be clear the revising to avoid non-compliance also means backing off on what Bellingham decided to do so it's a step backwards given that um is there going to be a step forward that the state could take because right now we're yoked to what the state has decided to do right yeah as far as my understanding goes the state has revised the energy codes to comply with that it's back they backed off but they Al what they did is they provided a gas um g a natural gas of fossil fuel pathway so you're required to gain more credits you can utilize those appliances but you have to gain more energy credits elsewhere in the building and and you would provide electrical Provisions in those Appliance areas like receptacles and service space um breaker space in the panel for future conversion so there so so so the revisions that they've made are in compliance right with the the Berkeley ruling but you know I don't know if you consider that a step back because most of the energy efficiencies are still built into the energy code so is it fair to say the new Statewide energy code the one that's complying with the federal ruling does actually um encourage and facilitate a path towards low or no fossil fuel

buildings but it doesn't require it because there is an alternate means to meet the code that isn't strictly avoiding natural gas right yeah that's I don't know if I fully understand the question but I think the state of Washington has revised what they can in order to gain that compliance by 2031 to be you know somewhat fossil fuel or less less um uh more compliant with the seat of requirements and you know the the uh um sorry I'm lacking the words to describe this uh I don't know I don't know it's a question once more it's a shame Scott because I think it makes it a little bit more complicated for you and for Builders if the code has all these alternate Pathways a Simplicity might have been preferable but apparently that sort of Simplicity wasn't compliant with federal law if I may I'll I'll just add that the the goal is for the Energy Efficiency and that's really what the what the code does in its form is allows you to get that that benefit what it does but what Sean's saying is that it it also allows for those that want to maintain a certain Pathway to using their existing appliances that rely on fossil fuels a way to do that but not at the expense of the Energy Efficiency that's correct yeah y City attorney Mariner yeah another way of saying that my understanding correct me if I'm wrong Sean is that it's now more incentive based than a Prohibition on using uh fossil fuels so there's incentives to go all electric but you can still have the pathway instead of a Prohibition

on certain types of construction uh from a Prohibition on using like natural gas any further questions clarification to City attorney Mariner um it says for information and discussion only under the recommendation in the in the packet but my understanding is that you're asking for adoption by reference tonight for third and final is that correct well it's it's listed under third and final ordinances you'll do third and final on automatically it's already listed so we don't really need any action this even uh this this afternoon today is just discussion yes during the afternoon okay further discussion okay seeing none we'll move on okay next item is an ordinance of the city of Bellingham uh amending Bellingham Municipal Code chapter 1720 to adopt by reference the 2021 Edition uh of the international called fire code so this similar um pursuing to RCW 19.27% or this proposed ordinance is for the city's adoption of the 2021 international fire code AS amended by the state in local amendments contained in the Bellingham Municipal Code chapter 17.20 city council reviewed the 20121 codes in May of 2023 however the State Building Code uh Council delayed the implementation proposed local amendments are attached and are recommend for adoption effective March 15 to align with the state's implementation date and here to take us through is division Chief uh Sean Linville afternoon uh the building official did kind of a heavy lifting on this we're just kind of following suit there was no

changes to the fire code uh from the vote back in May so I'm just here really for information and if you have any questions comme nope I see no further questions and so again this is for final consideration this evening so we'll be taking about a third and final for this tonight that's I understand yes that was easy all right thank you perfect okay next item is um an ordinance of the city council of the city of Bellingham Washington authorizing the issuance of one or more series of limited tax General obl obligation Bonds in the aggregate principal amount not to exceed $26 million to finance costs related to acquiring designing constructing developing improving equipping and Furnishing uh City facilities delegating authority to approve the method of sale and final terms of the bonds and proving other matters related there to so there's an attached ordinance here that authorizes the city of Bellingham to issue up to 26 million in general obligation bonds to construct phase two of the Pacific Street operations center for uh facility improvements the facility will house Public Works operations and administrative Services the 2023-2024 banial budget includes $24 million for this project bonds will only be issued for the actual anticipated cost facil of the facility Public Works plans to go out to bid on the project this month and here to take us through is I guess uh Andy as bornon uh it's listed Forest Longman but we go ahead sir yeah thank you Council apologize for the long

wording of the bond ordinance so it is written by legal it is uh standard to have all the elements in the in the title of the ordinance and so this is to really authorize the city to um obtain a bond on for the for the upcoming construction for the second phase of the uh Pacific Street uh complex so that's expected to go out to bid in the next couple weeks and from there we'll have better numbers as to what um what we'd expect the bond to be happy to answer any questions go ahead counc a little requ so um I have two questions um this is about borrowing the money but then it'll be paid back and uh given the project uh that it's related to can you tell me the source of the funds to pay it back will it be it's a general obligation Bond but it seems to be Public Works is utility funded right so that would be a revenue Bond if it was a utility project so what will the source of the payback the loan be and then I'll have a follow-up question a little bit different yeah this is um uh established more as a general obligation Bond instead of a revenue Bond so it's not pledged by the uh rates structure in there um and so the this is similar to the last round where it was hous in the facilities fund and we obtained about 20 million in bond funds to build that first phase of the of the Pacific Operation Center so from there the source of the funding will be the street fund the Wastewater fund the water fund and the storm water fund that will all be paying into those future Bond costs um

I'm sorry I didn't I didn't maybe no so regardless of the fact that some of the money may actually be from utility revenue it's still going to be backed up by our general taxing Authority so it'll still be a general obligation Bond yes okay thank you I have another question unless someone else go Michael so the project um this this has to do with uh the uh the financial report we can give later like one of the things that you and I were talking about is the fact that um capital projects aren't finished or paid for overnight they're often and the payments are delayed maybe the maybe the the uh the contractors paid out in payments based on performance um and uh it we don't necessarily need to borrow $24 million for a project when the last dollar of the 24 may not go out for a year and a half or two so how do we do that how do we minimize borrowing more money than we need not because a project won't cost that ultimately because we don't need that much cash that soon in the process um how will your department manage that to reduce our borrowing costs yeah when it comes to a Geo Bond we do get the lump sum at the beginning so it isn't something that we just pull draw down over time like uh like a reimbursement basis that would be able to do that how we try to manage the expenses or the amount of borrowing we need to do is really get that accurate price on the construction itself so we're not going to go out for the geobond until uh until we know that that final bid price to go out

so there's you're always hoping to get those numbers perfectly right I still think there's about I think I heard there's about half a million still left to on the first phase of that pck so we're going to see if we can maybe even roll that into the next phase or or find ways to spend that but basically we need to monitor any borrowed money from bonds and and keep track of that separately and and report if there's any potential for arbit or or we have a certain window of time to be able to spend that money in and so we're going to be we expect the project to be done within that period of time so what I guess I'm saying Andy is I I've seen for example in our financial report she'll get this huge and ridiculous spike in so-called Revenue one year and then the next year we'll overspend and we'll be doing so-called deficit spending but really that was we just borrowed the money in 2023 and suspend it in 2024 right but if we accept this money in the lump sum when a sense will be carrying cash more than we maybe needed to I'm just wondering how we can minimize that by kind of like estimating that maybe we don't need to borrow all 24 million we can borrow I'm going to make it up 20 million or 19 million because it turns out we can bridge that without having to borrow the full amount I mean I don't know how you would manage that but it just seems to me I've seen too many times where we've had this huge borrowing and then we carried a cash balance for more than a month or two for a

year or two sometimes on bigger projects before it was spent down so that's borrowing we didn't need to do now necessarily and therefore borrowing costs we didn't need to incur if we could have figur out a way to avoid them yeah I mean we we do our best on the front end but sometimes reality doesn't pan out the same way as as you project or or project um so uh with this project we are we are waiting for that ultimate bid so we know what the actual bid amount is uh at that point we will have conversations about what what that final bond amount should be it's it's good to make sure that we have contingency funds as well as as construction projects aren't uh always on track for spending so um with that I mean we do have a a window of time I believe the Pacific operations center was built in about a a two-year period and only had some delays with some uh some items that were delayed in in returning I don't know if is that about right about twoyear period so I mean that's that's pretty good to be able to get a $25 million project out in that one to one to twoe period and so that's the expectation I think with this next phase that it would 18 months or so of of projected spending so we don't anticipate there being funds remaining for a significant amount of time council member Anderson thank you I'll have a couple of questions but my first one is tying into that a little bit and I was just trying to get a better understanding and um it's if anybody wanted to try to look I can't

read because of the overprint on pages but um looks like it's 137 section 7 it has it basically lists that the finance director shall invest money from the project fund and um it kind of has some content in there about um basically permitted by law and will mature prior to the date of which such money is needed so I'm assuming there's the possibility by reading this that if we got 26 million and maybe the project was a three-year lifespan and there's a certain amount of money that we are not spending quickly um is the plan to put that in some kind of CD or money market in order to gain interest because it states in here that um any interest or earnings thereon may be used for other capital projects within the city or shall be transferred um so is that kind of how we handle our bonds so that we don't have this this huge pot of money sitting somewhere not working for us and then if that's the case is there a way of projecting how much money that potentially might earn and that's being figured into how much we have to borrow um that it's a interesting question on um it's it's definitely um we put all the money that is even in our checking account or our bank account to work so we even have an interest rate that we're able to get even on our bank account now so and then other than that we look to invest as much as we can uh we're also potentially limited um I haven't gone through all of the fine prints we haven't gotten to the actual final uh Bond do this is very similar to the

other bonds we've done in the past but oftentimes you're capped at the amount of interest you can even receive potentially you're not supposed to make money off of a bond so we can't get a bond at 5% and reinvest it for 6% it's not you know meeting the true expect expectation of why you had uh needed the money in the first place or why you received the bond was for this construction project so we wanted just obtain the money at the optimal time of when we can spend the money and move the project as quickly as possible through the through the process so um yes any idle funds are are put to work at the city we look to invest as much as we can got a direct followup I'm g go to I'm going to go to council member pman next and then back to you I'll just go ahead and move approval okay council member Anderson thank you um so also in here um trying to see if I get the the right page uh basically I think it's 140 at the top it says that um following the execution of the cell document designated representative shall provide a report to council describing the final terms so even though we are approving to go ahead and go forward with the bond once we get the exact cost and then we're going to go out for the bonds I assume reading this we can expect this will come back for whether it's an information briefing or final approval so that we know what we're what we're going into debt for yeah with that um thank you we're we're subject to the market so we have uh we're not sure at this point

as to what the final numbers will be but we'll bring those numbers back to council uh for your review council member Stone I'll just provide a second to council member Hon's motion further discussion from committee good just a follow up on that last comment I think in here it says something about not to exceed um 5% um if we find that the market is not coming in at that and it's a higher amount does that undo this because I didn't see a writer Clause that gave administrative permission to go ahead and go with like a 5.23 or something will this whole thing have to come back to council for a new approval if that's the case uh potentially I mean if we were if there was some big change in the market as to when we go out um this is reviewed by our our bond Council it's prepared by our bond Council and reviewed by our our um financial advisers at Piper Sandler so they have a they do this all the time and have a very good idea on what our ratings will be or what our our bond costs will be um so we are looking to hit that Mark but if we we would make sure that we are in full uh compliance with the ordinance that we're bringing forward uh otherwise we would not be able to do that motion's been made by council member Huffman seconded by council member Stone go ahead council member um so just briefly in response to council member list and council member Anderson's um questions just wanting to highlight right understanding is that on City projects we need to have 100% of funding in hand

right before a project moves forward so so when you're talking about those timing issues right needing that money when you're talking about how long money is held or you know in the bank and when people are looking at our budget numbers um just the fact that that money yeah 100% of it needs to be on hand in advance and then the timing of that project um will move forward as expeditiously as possible but as you noted sometimes there's unexpected you know delay but so just a clarification that of why right we would seek that to hold that money for any period of time um and also just confirming what you'd said that the actual bond amount obviously the rates and things may change as well just because of Market um but that amount will be based on the bid Award right to be determined yes it would and this if this was a bigger project maybe we would Bond it in phases or something of that so we wouldn't have to have all the money up front we would need Council approval um and a and a spending plan and a game plan on how we would fund that in the future further discussion committee Miss get did you get the first and second on that okay uh seeing no further discussion all those in favor signify by saying I opposed abstentions recusals motion carries 70 I'll bring It Forward tonight okay thank you next item is has the shortest uh subject um versus the the last one uh this is RG Haley Cornwall landfill site remediation and Salish Landing Park phase uh one project update in conjunction

with the remedial cleanup construction measures at RG Haley and Cornwall Avenue landfill sites the city will construct phase one of Salish Landing Park project components include Upland capping Nearshore capping and armoring with a soil cap as well as inwater soil capping and Eel Grass mitigation the first phase of the Salish Landing Park will be constructed simultaneously and will include all underground utilities that will be located beneath the cap as well as a small parking area parking lot area trails and the South Beach permitting is underway and the three-year construction activity is anticipated to begin in 2025 and staff will now present an overview of the cleanup project in phase one of the park project and it's listed here that Eric Johnson will be the um the presenter but I'm not I'm seeing uh Mr Muller and and others from uh public works so go ahead my name is Mike Wilson I'm the city engineer and assistant director of uh public works over engineering and Eric's asked me to introduce uh this topic uh briefly and we do have Craig Mueller here to um walk you through a presentation you know there's been more than 10 years of planning and Design des and coordination efforts lots of support from legal and parks and state agencies to get to this point and uh just a great opportunity for the city to convert a cleanup site into a a public park that'll be a nice asset for the city so Craig thank you uh Craig Miller Public Works project engineer uh I grabbed this one from

my boss's desk about 2012 uh because my background was Environmental and it sounded interesting so be careful what you wish for um I got just a a brief presentation which will uh give you an overview of of what we're going to be doing down there uh I know I personally could talk at least a couple hours on this uh and I know the uh the parks uh Parks folks could add at least another hour into that one so I'll try to keep things uh timely so as you're aware there's a significant number of uh of cleanup sites throughout Bellingham Bay and the ones that we are uh concerned with today is the Cornwall Avenue landfill which is the green one and uh RG Haley which is adjacent to that in blue it's right at the end of Cornwall landfill uh commonly known as uh Glass Beach slide shows how things tie together if you assume that North is to the right side um RG Haley is uh the north half Cornwall landfill is the South half and the Salish Landing Park goes on top of both of them these are are planed to be built together uh the the site remediations as well as the first phase of the park give you a little bit of sight history here uh originally this was all Tiel lands uh about 1880 or so the uh the railroad came in uh then Lumber uh uh lumber mill to 1947 and after that uh wood treatment so you can see here 1950 remnants of the large uh Lumber Milling operation and notice all the piles there 1953 to uh 1953 to 1965 is uh the the range of these photos uh the Cornwall landfill site was a

municipal landfill uh we actually just dumped garbage directly into the bay don't do that anymore and this closed down in 1985 I believe 1969 photo you can see the closed landfill and the uh the timber operations that were going on and just as time goes shows just how much more of the land was filled in 1994 warehousing in a logyard 2006 vacant industrial land uh the city purchased the RG Haley site in 2009 and this is the story of the Big White tarps that are down on the Cornwall landfill site uh there's approximately 47,000 cubic yards of sediment from um Squalicum Harbor maintenance uh that were dredged and were placed there um at for future use as a secondary uh low permeability soil layer uh for use in the cleanup so that's where that came from you can see those there now and that was done as an interim action we have had uh one other interm action uh in 2014 or so 15 maybe we had a uh an oil seep uh coming from the site that we we addressed through a temporary measure uh to stop the oil from entering into the bay and then that will also be incorporated into the uh the final solution here so little paperwork out of the way why is this taking so long initial site assessment that's easy you determine that there's it's a contaminated site it's evaluated then you get into the real nuts and bolts of the remedial investigation and the feasibility study remedial investigation is your sampling how bad is it how bad is it throughout the whole thing where uh what What's present um

I have a hard copy of this which is two 3in binders on my shelf that's just the remedial in uh investigation tables lab data then that information is utilized for a uh a feasibility study and the fusibility study takes that data says okay we have an issue what are some solutions you look at you give several options and make a recommendation to uh Washington department of ecology which approves it the recommendation is the one that will give you the most uh protection to uh to the public and the environment at the most reasonable cost interm actions if necessary like I said we had an oil seep we reacted to that uh until you can actually get the permanent uh fix in and now we're into the blue and purple the consent degree and decree and cleanup action plan I'm sure many of you have heard that we had a uh walkth through at the site uh about a week ago and that was because the consent decree is is out for public comment and what that is is an agreement between the liable parties and the department of ecology that will uh we agree to do the cleanup we are currently under an agreed order another agreement with ecology uh to fulfill this through design so that's what what kicked off uh a lot of this is just the public uh period cleanup action plan is is completed remedial design we are now at the 90% design level for all three projects Cornwall Haley and uh Salish Landing they are currently under review by the department of ecology permits have been applied for uh then it's

construction monitoring and I'll I'll get to uh what's next here towards the end so what's actually going on down there this is a the concept of what's going on at RG Haley or what was in the past you have wood treatment um is it's a carrier oil with uh pentachlorophenol which was the preservative or preservative uh you have the retort where you actually treat the wood store it indoor store it outdoor that leeches into the groundwater or leeches into the ground and uh rests at the groundwater table groundwater table throughout the year will fluctuate in elevation um and leading to what is affectionately known as a smear Zone then if you look Downstream because of course groundwater does flow there is a uh a section of oil uh of loose product and that's actually what seep there there is a are the previous owners installed a uh oil collection system uh that's what the sheet pile walls are out there and that has been in use since it was installed over the last say 15 years or so uh but that will be addressed here as uh in our our final situation so that's what's going on in Haley Cornwall is a little bit different in that you didn't have the contaminant seeping it was just dumped there so we have uh Municipal Solid Waste just everything that goes into your garbage can uh that will groundwater flows through it contaminants end up end up in the bay it's actually where the glass from Glass Beach is coming from so the key contaminants for RG haly is dioxins and polycyclic aromatic

hydrocarbons big word but basically contaminants that um result from from combustion uh pentachlorophenol which was the wood treatment and petroleum which was the carrier oil uh that the the chemical was put in so that it would penetrate into the uh into the oil or into the wood Cornwall landfill there's a lot of wood waste down there uh a lot of sawdust landfill gas um heavy metals semivolatile organic compounds C CBS it's your your typical typical landfill stuff uh and it affects the soil vapor from the soil groundwater and sediment all right that was the problem now is the solution this one looks a little little confusing but I I want to walk you through it there's really three components to this there is the Upland the Nearshore and the inwater portion um the Upland is in brown beige whatever it is uh that the brown area shows just RG Haley but it it shows imagine all of the Upland as beige what this also shows is that the dotted green dotted line between them um contaminants don't know property lines so there is some overlap between the two uh the call it the dotted area I don't know if you can see this right right there that is an area that is going to be treated with insitu solidification remember I showed the area of uh of the oil what this is is we excavate down or you can do it with uh uh with a large augur but because of all the piles that you saw before in other slides it's going to be difficult to do that so probably with excavators you excavate the waste and you

mix in a predetermined concrete slurry and then you put that back that will create an impermeable barrier and will solidify and keep all of the contaminants through that zone uh intact in in one place and will also prevent the uh the groundwater from passing through it so that's the area of insitu solidification green area and you have to imagine is the near shore and there's there's Cornwall and Haley which get different treatments and I've got crosssections for each of them so the green is going to be a sand layer with armoring and uh fish mix on top and in the near shore we're going to excavate to the pro to the appropriate uh grade to uh to resist erosion uh place the capping in there and the sand cap initially underneath it will be amended with either an organophilic clay which uh will accept or will will only absorb uh oils not water uh or an activated carbon so that will also be amended into that uh that cap Cornwall Shoreline does not have the amendments in the near shore then you have kind of a gold yellowish color uh that is the inwater portion that does not receive a uh anything that's just natural uh natural sediment from the Nook saac that will slowly build up through the area you've got a darker brown in between the green and the tan and that is a uh an amended soil layer itself without any armoring so Cornwall will have the Upland we have the Nearshore armoring without the Amendments and uh and some of the the in water some of the cross-sections there's a lot

here but what I really wanted to point out on this and it's hard to see but the gray on both of these cross-sections that's the insitu solidification if you think of this as essentially a wall you take the uh the dirtiest spots and you cement it literally cement it into place um that's what the gray is and then you can see the different layers of the sand amended uh amended sand cap here armoring um and fish friendly surfacing on this one you can see it extending out quite a ways and what this is is uh an eelgrass uh mitigation site current uh eelgrass beds will uh will be destroyed by the construction and will be replaced and uh in um I think of the correct word and mitigated for there will also be additional uh uh forage fish habitat improvements down at the Glass Beach area corwall landfill same thing but without all of the different colored layers it's it's a little bit simpler there Cornwall will also take the brunt of uh a lot of the prevailing wave action so moving on let's get to the fun part all the remediation we've uh what we are are going to be doing with the Upland specifically is it'll be graded rough graded then we put a uh a gas drainage layer which is just a synthetic material on top of that that will collect landfill gases and we have a 40 mil linear low density polyethylene uh liner material it's it's a a standard landfill cap material that goes onto that and it's all welded together uh on top of that is a drainage layer and two feet of soils of rooting

soil and top soil so once all that is done it's time to build a park so what you're looking at right now is the master plan that was put together in 2014 there was a significant public process uh this is the when fully built out this would have uh approximately 250 parking stalls a concession Building observation Hill uh the South Beach Trails uh access to uh or beach access we aren't building it all yet we're building phase one and as I said the remediation and the park will be built in phase one of the park will be built in the uh at the same time primarily because of that capping system that I just described uh we will be putting in the utilities which you can see here in uh in yellow and orange and those will be basically anything underneath the cap material or that needs to penetrate the cap material uh would be done with this construction which is also why parking lot ends here but we're continuing to put utilities out here that would be used for future phases it's not that you can't go back and uh and put these in later it just is a lot easier if you do it all at once so what this phase of the park will have is approximately 27 parking spots uh you'll have the the trails uh the access roads for uh for the remediation will also double as Trails uh the South Beach and there in the upper leftand corner is uh it it's basically it's a rock um Breakwater because of the wave action coming through there and to prevent scour so it was um we've got the master plan future phases

will uh will be done it was adopted by the Bellingham Parks and Recreation advisory committee and uh the Bellingham city council so what's next we anticipate permits will be issued in 2024 uh we haven't heard any any issues yet um we submitted in I believe October uh as soon as those are done we complete the bid documents which are currently at 90% design level that would allow us to be out for bidding in late 2024 if that is the case then we would begin Construction in 2025 and be able to uh open the park sometime in 2027 now the real fun part estimated costs RG Haley has a estimated construction price tag of 28,300 th000 for the for the remediation Cornwall landfill 17 million Salish Landing Park Phase 1 2,400,000 of those of the two remediations we have a 50% uh model toxic Control Act or mka state match for the cleanups a funding plan plan is being developed uh for the local share of the remediation and the park will be paid for through Park impact fees uh Reit and green Weiss that is all I had questions thank you for your presentation committee go ahead C over lqu first of all Craig thank you for the presentation and for taking all those years to come up with uh a sound environmental remediation um that deals with our our past mistakes but hopefully in a way that is permanently protective of the environment so I have have no qualms or questions about the remediation I do have a small question about the park uh the seos landing park because the city council has been I've

been receiving a lot of emails commenting on the park project apparently that Park project is Seeking a permit and so there's comments being received and part of that has to do with the number of parking spaces which surpris me uh phase one only includes 27 spaces but uh the public is under the impression that actions we're taking today are committing to 213 spaces I don't know where that number comes from and as you indicate the master plan roughed in around 250 so what will the thank you Parks director what will the future actions be uh beyond the 27 spaces here in phase one for discussing and evaluating whether or not to continue with the master plan as adopted the perfect person is here to answer that uh good afternoon Council Nicole Oliver Parks and Recreation director yes we we did receive a considerable number of um comments about the parking spaces as part of the sea review of the shoreline permit so the shoreline permit took a look at the entire park the full master plan but we we are only going in for permits to build phase one uh with the in conjunction with the cleanup and that will also have a building permit but it's going to be a considerable number of years before we come back and complete this park and there is going to be ample opportunity to refine and think about um that Master Plan uh because when we built don't forget when we planned it there was another really important thing at one end of that Park and that was the overwater walkway heading toward

Boulevard so we do uh have some great ideas about pedestrian connectivity and improving that um and those ideas will be more refined as once we're done with phase one and using it for a while but it's going to take some thinking about The Pedestrian connectivity to South Bay Trail up to Depot Market into the new Waterfront District there's a lot of thought that's going to have to go into that thank you any further questions seeing none thanks for the presentation go ahead C and I don't know if it's would fall outside the scope of this this work but one of the things you mentioned is that when the city was using that site the Cornwall landfill um area that some of the waste right was actually put into the bay or maybe residually maybe not unintentionally or intentionally right into the water and so a lot of the mediation Focus see is on the right land itself and obviously visually seeing those tarps and wondering if as part of that clean up how much if any we're going out into the water because then you're addressing the eelgrass and other things that will have um need for attention but whether there's concern about waste obviously the glass that glass Beach right and the connections there but if there's waste that we're needing to extract from the water and damage to the surrounding water itself beyond the land there in the park um that's actually part of the inwater work what's the good slide to show that all right so this one here and again long story short there's two

design teams or three design teams on this that's a whole another long story um but there's the Upland there's the Nearshore which is really just shaping it armoring it protecting it from eroding and then there's the inwater portions and the inwater is uh is sand camp in it for the benic layer which is is where organisms uh live and um we're the worst portions of it are going to receive this uh this soil cap uh the areas that are still contaminated but not nearly as bad are the ones that have the monitored natural recovery of the siltation that's brought in from uh from the Nooksack so it is all being addressed further questions um I'll take a go um I just want to get a reality check the the overwater walkway was brought up here um uh during remarks at the end of the presentation and my understanding is um the that the funds for that were end were um they ended up being spent for Laurel and Greenery to construct those um those roads on our Waterfront and that lumination has a a protest letter in with the Army Corps of Engineers and I don't know if that's still current or not um but I just want to get a uh a reality check on the possibility of that overwater walkway the connectivity um benefits would be amazing to have I mean you can can you imagine getting on your bike we have to figure out the ASB thing the the trail around there to the the connectivity there but can you imagine getting on your bike or or going out with your family and walking from the northern uh and end of

town to to the southern end of town all along the the shoreline it it would just just be be a game changer so I'm just wanted to check in on that Amy crem legal department and um council member ham you're correct that it was many years ago that uh we were investigating the feasibility of the overwater walkway you may recall that we had permits um I believe almost completely in hand um but the lumination did not want us to complete that for a number of reasons um we spent some time trying to work out something that would be acceptable and then we had a change in administration and um there really hasn't to the best of my knowledge been a discussion again with the Lumi Nation about whether their leadership would be more interested now or whether there was some um mitigation that would be acceptable thank you committee further questions okay seeing none thank you for the presentation appreciate your time this afternoon thank you very much thank you okay moving along um our next item is a memorandum of understanding between wakin County and the City of Bellingham regarding the State Environmental Policy Act co-lead agency agreement for the ABC recycling facility the ABC or ABC Recycling is applied to wakam county for a permit to build a metal processing facility the proposed facility would be located within the city of bellingham's urban growth area that is currently part of unincorporated wakam County the memorandum of understanding is to establish and describe a collective

effort for the sharing of lead agency responsibilities under the State Environmental Policy Act in order to conduct an environmental review for the proposed ABC recycling project and here to take us through is director Blake lion thank you council member HL and Council thank you for uh giving me the time this afternoon um wanted to walk you through a little bit of what we're requesting of you this afternoon um first of all and by point of clarification the Marine Drive property is uh located entirely within watom County's jurisdiction so uh we do not have a role or responsibility in any of the land use or zoning decisions associated with that particular property um and what we do have is uh the property is located within the city's Urban growth area and we have an existing interlocal agreement where the county and the city work uh provide the county provides notice to the city when they are considering such actions um in evaluating projects and it's with that um kind of agreement in mind that we are requesting your consideration of an applying for uh what we call co-lead status in the environmental analysis and so anytime you get a development proposal that's coming in you go through the uh environmental review process under the State Environmental Policy Act and we're asking to be kind of a co- lead or partner in that particular effort and theou that's included in your packet uh outlines the the provisions that are associated with that so just to give a little bit of

framework of um of how we would what this means to be co-lead and I'll take a step back and say okay uh what would it look like if we were not to be co-leads if we were simply just to maintain the existing uh roles and responsibilities um the city would be in a situation where we're considered a local agency and we would provide comment to the um to the county as the lead agency uh and provide different information on what we think would would be appropriate to study in those environmental documents if we shift into this co-lead authorization it gives us a seat at the table it gives us the opportunity to work in partnership with the county and um and allowing us to do some kind of side by side evaluation and some of the examples of things that might be considered under that co- lead um often times when you have documents of of this nature with environmental review um you'll bring on a consultant so it'll be the selection of that consultant process that would be part of it uh go through what we call a threshold of determination which is to evaluate and determine what the appropriate level of environmental and analysis would be uh whether that's a um an Eis or something lesser than that uh once that determination is made then we go through and evaluate the type of document that that is in fact necessary uh and that would be part of it and we would we would go through and work with our public which would include just the general public include some of the affected tribes and

effect include a number of different state and local agencies to scope out the the amount of review that is to be performed as part of that documentation um and as we go through that process and you're evaluating the scope and the degree of the analysis that's being provided you're also looking at what the variable uh project Alternatives uh might be and there's often times a no project alternative and then some variations of what has been proposed and ultimately arriving at a preferred alternative which is what is then uh analyzed in Greater level of detail detail in the in that document um included in that is often times when you identify if there are impacts that are identified you're looking for mitigation measures that are trying to Simply reduce the impact those environmental impacts to the greatest extent possible and so it gives us the opportunity to work with our public as a whole and to provide some uh real input on what those mitigation measures are and go through an opportunity to provide and uh response to comments review the draft of those documents and ultimately um if necessary defend the the analysis that was prepared in that document so we are asking uh for your consideration and allowing us to take on that responsibility as co-lead the one point that I want to make uh at the closing of this is that uh should you agree to allow us to move forward as a co-lead that is specifically and lied to the preparation and review of those environmental documentations we

do not have decision-making Authority when it comes to the project itself because that project is entirely within the County's jurisdiction they will take the responsibility of these zoning and land use decisions and we are simply um evaluating that as a local neighbor we're not part of that decision-making process so I'll stop there and answer any questions that you might have ready C Williams like to move approval your mic's sorry I'd like to move approval of the recommendation second a motion's been made by council member Williams and seconded by coun council member Huffman council member Anderson go ahead thank you um for some individuals who may be watching and not looking at our full agenda uh we did have conversation in executive um more extensively about this which might be why we don't have a lot of questions because we were able to filter a certain amount of information on that um and hopefully I'm not breaking a rule but I did want to communicate that um communication will be very important with our community and I think this is a really good step to go forward because it will allow us to sit down with multiple partners across the community listen to their concerns if they have good ideas or there's research available or there's particular elements that and an environmental study that they would like us to look at we're going to be able to have that dialogue and and take a look at the total potential impact for um the community so I think this is a really good step

for us to have a seat at the table um also in this packet if for some reason we are not able to be equal Partners in our role as um Limited in here which is really looking at um environmental and impacts we always have the ability to notify that we're no longer going to um be part of that uh working partnership with the county and then we can kind of switch roles um if we feel that um it's not supportive or productive in the best interest of our um um greater Bellingham community so I I think it gives us a good seat at the table gives us a little uh agency to be able to really look at what the impacts are going to be or have influence on what gets looked at so that um if it goes forward it's going to be the best version of things going forward um but we'll also be able to hopefully listen to our community on what their concerns are and address that uh so I think this is a good uh good opportunity and just want to communicate that it doesn't mean that we're not going to be able to have um engagement with our citizens I think in a way it's going to give us more opportunity for that engagement so I'll be supporting it mayor lond then council member Stone I think council member Anderson raised an important point about the way that theou is structured and that we have the ability if that relationship um is contentious or or we don't see playing out to the city of Bellingham and our residents best interests that we can reconsider our position but I just wanted to reemphasize how

much staff time it was a conversation across all department heads um many members of the legal department it was a lot of careful consideration about um asserting ourselves in this co-lead role in the sea process um and it was not one that we didn't step into lightly so thanks mayor council member St yeah thank you president Hamill um I just had a question regarding the umou itself so on page 178 in section J it identifies sort of the lead for communications on this particular mou for the county Amy Keenan is listed and the city's currently blank and I was just curious if that would be you director lion or mayor if we have someone identified yet Kurt Abel is our sea official so it would be the one that was responsible there perfect thank you committee further questions and seeing now there was some oh sorry go ahead C myquest thank you Dan um so I was initially very hesitant and skeptical about taking this approach um because we have another alternative and that other alternative is just to be direct Advocates and participants in the public process so that we could have been actively engaged with contributing information writing letters advocated for something we weren't without power in terms of influencing the process and and that seemed to me a completely viable route to go and so I was skeptical as to why this would be better and part of my skepticism is that if that was the case if we were direct participants my role would be pretty clear and pretty simple I would look

to identify I think it was in The public's best interest see if we can get agreement on that and then we'd advocate for it um but as as you've indicated Mr lion there are two distinct phases here and understanding those two distinct phases and their differences is what I think is changing my mind the two distinct phases are the environmental review and then the project permit decision later and by getting ourselves involved in the environmental review I knew that we would have to actually be impartial we could no longer be Advocates advocates for or against the project we would have to suspend judgment and go through the process and derive the best information we can without bias and then generate the environmental report and so that's the opposite of an advocating role and so I would have to step back from that advocating role and I saw that as a as a loss as tying my hands and maybe I didn't want them tied but as I Now understand it there will be a second part which is the permit project permit portion once we are done in our role as code leading the environmental review process once the report is generated once again I think the city council and the city will be freed in sense to have an opinion to Advocate before the the County Council and say Here's the objective report here's also our opinions about what we would like to suggest or advise or guide you to do but then it's their decision so I was really worried about abandoning the ability to protect the public interest

now I'm seeing I still retain that in the end as an advocate but then as you're suggesting the administration we can also be a different kind of advocate during the environmental review process not by prejudging the outcome but by ensuring that the review process is the best it can be and even though um I'm hesitant with stepping away from originally um I'm I'm I'm willing to fully support this as what I hope is the best way to protect the Public's best interest any further questions go ahead Mr CT well thank you for everyone who's put a lot of work into this um co-lead status seems prudent uh I just have a couple questions about really one question about um the staff time associated with this relative to to just being a commenter and um and what that will look like and and who will be involved in that well our um as was mentioned earlier our sepa official will be the the primary person so Kurt Abel will be there there's obviously a range of different staff that will be identified throughout the course of this but it would be a little bit premature determine entirely what that's going to look like only because we need to go through the process of um doing that determin that threshold determination identifying that and getting the public input not only the general public but the tribal input and the state agency input and that will develop the scope of what type of environmental analysis will need to be prepared in response to those various different comments and then that

will give us a an opportunity to determine how much staff time and commitment so it's a little bit premature for me to be able to answer that in in great level of detail we know it will be uh you know it will be a commitment we're prepared to to adjust that and work with uh the administration on what those kind of staffing needs will be and how we balance and manage those resources and priorities but at this point until we do that full scoping we wouldn't be able to answer that with detail thank you any further questions okay the motion's been made by Council member Williams and was seconded by council member Huffman um I just want to underscore director lion um the comments you made about that the city council doesn't play a role in the project component of you know permits or anything that that's related to to that part of it but we can play a role and have a a seat at the table when it comes to the environmental impacts and I share a council member liquis original concerns but I do think that having um having a seat at the table is very important important uh for our citizens we are literally Bellingham is literally in the middle of that proposed um subject parcel and then where those um where that product will be shipped out of we're we're right in the middle so we need to have a seat at the table um further discussion seeing on all those in favor signify by saying I I opposed extensions recusals motion carry 70 okay thank you and next up is uh this is the 2023 pardon me

uh Financial year in review um this presentation provides a summary of the city's preliminary financial position for the period that ended December 31st 2023 and this presentation and additional financial information is available on the city's website you can just go to cob.org and look it up uh under Financial reports here to take us through is our finance director Andy ASB arnson right thank you thank you Council almost almost ready real quick a lot of paper with a financial review we'll give you a minute um all right if I have my okay so I was able to print a copy for everyone so that you had it in front of you as well um sometimes it's a little hard to tell when you're looking up at a projector um as to the details of Financial review um some lend well uh to the big screen others you need the the finer detail there's a lot of information in here so this was not um this is actually post to the website as well so you can find it on the finance department website um or location that's at that link in the agenda bill um so you can walk through at home as well um so this is um covering 2023 um what I'm going to do is kind of start with more of the financial indicators what we saw out of the year you're welcome to ask me any questions uh throughout um and just kind of walk you through what we're seeing what we're kind of what indicators we we recognize existed in 23 maybe what concerns we have going forward and what actually how the indicators actually apply to the numbers that

come out in the report so I'll go ahead and and start going through a lot of these slides you've seen before start off with sales tax this is one of the big generators for uh Revenue within the city the red line is Is 2020 that is our covid year this is the big dip it took during covid each uh point above the month is the amount of cash we received at the end of the month for that month but the activity is always two months before so if you're looking at April that's activity of February um so all this money that we received in April that was activity sales activity of of February so uh the red line you see is 2020 the co year we had a 14.5% increase into 2021 a 7 and a half% increase into 2022 we saw a 4% increase into the green into the 2023 year what we did was remove this outlier that we had spoke about is we received a onetime $1.4 million do audit that um had us receiving funds from uh previous about activity of 2013 2015 so we've removed that from the data so you can just see uh actual activity some of the concerns we have in looking at this chart if you see the green line actually dips below the yellow line right here and November so the only times I've seen that I've seen it twice now in the last four months um so we've seen that in November and we saw it also in January so that has concerns that we've actually made received less money for the September time period uh in 2023 than what the activity was in 2022 so we're starting to see a dip of or leveling off of the

sales tax activity is just kind of the start of that uh so what generates our sales tax here locally so our sales tax uh the big producers these five categories what we've done is um categorized this by the uh the national or North American industry classification system um that's a six-digit number this is rounded to three digits and these are top five producers of sales tax represented by about uh 59 or 49% here in 2023 so our biggest producers are most vehicle and and parts dealers and then construction um construction is a big big uh player to our local economy uh this is just one of the categories of the Nic codes also oftentimes the sixth and seventh item will be related to construction maybe specialty construction or or um engineering or things of that nature um so these are the big carers that we look at also there's um which I'll get into the next slide but so these are are big ticket items um that really generate a lot of the sales tax um to our region uh one other aspect we put here is we want to give a comparison um this the whole block is revenue the Orange is $29 so what this represent is uh We've adjusted it for inflation so if you see in 21 we've basically received almost the same well we've receiving 28.2 28.2 28 to between 22 and 23 we basically have the same spending power that we've had for the last three years so uh even though we received 33.6 million in in sales tax it's the equivalent of$ 28.2 $19 for spending power so it's it's really leveled off

since 21 when you're um adjusting for inflation if we put the property tax up here it would be even in worse shape where it's it's making less money every year at just the 1% growth so this one if you can focus on the left side first uh there's a lot of activity on these slides so on the left side if you see this um black line represent the federal funds Target rate so this is the Fed increasing the federal funds up all the way up to about 5 and a half% here uh the orange line is CPI so this represents CPI and our elevated CPI that we recognized um through these last couple years and you see once the FED started increasing the federal funds rate CPI started to decrease the the orange numbers on the right represent the CPI black numbers on the left represent the federal funds rate so you see the increase the fed's effort to bring inflation down to 2% their target is really 2% here so it's been a little bit sticky around this 3% um we're supposed to get another CPI number tomorrow is is the updated CPI number they expect it to come in about 3.1% so it's still still sticking at about that 3% fed wants to continue to keep these federal funds rate um interest rates High until they hit that 2% mark is really the effort some of the concerns here some economists have said that the um the stimulus funds that really pumped up the the economy over the last four years those are becoming uh those are going to be kind of spent down in 2024 and so the impacts of that should lessen and

hopefully uh some of these um levers that the FED is pushing will actually work to get the inflation levels down to that 2% um on the right side uh this the bars are active listings of housing um the line right here is the average active listings and then the orange line is average listing price so this peak right here is we put this as it reflects to the left side as the lowest point of when the interest rates were is right here where it was peaking fed starts increasing the federal funds rate and the line starts to go down but locally we've seen the line actually level off and start increasing um to end 2023 which is definitely concerning so the average listing price at the end of 2023 was 930,000 here locally this has also impacted what we've seen from home sales and what we see in our Reit activity so Reit was down 26% uh for the year uh and it had more of the record years at the lower lower borrowing rate so when we're looking at these These are U directly impacting by our borrowing rates and you see that our first two uh highest level of sales taxs are really those High borrowing items it's motor vehicles and it's housing that really generate that that construction and it it's all tied together so uh these are just the activity that we saw um going through next item we have the federal funds Target rate and permit activity so uh what we've done on the left is again the black line represent the federal funds rate so this goes all the way up to the 5 and a half% it uses

the right side access and then the blue line is before the federal funds rate increased and the green line is after uh it started to increase um the left side represents permit Revenue so the amount of construction Revenue that went through the permitting Department um before federal funds rate and after so you see that the Blue Line uh the blue trend line is a trajectory up and then the green trend line is a trajectory down after the FED started increasing their federal funds rate on the right side we've taken number of units so the same applies the Blue Line represents the trend line of units slowly increasing prior to the FED increasing um and then the green line is a reduction of units uh based B on the trend line associated with after the FED started increasing their um federal funds rate what we saw in in 21 was a record year for the perit activity it had uh 12 almost um, 1300 units uh going through the permit department and about 260 million in activity so um you compare that to 2023 168 million in activity and only 422 units that went through the permanent department so so we see a reduction in in the pipeline of what's coming through for construction but prior to that 2322 uh there was a lot of construction activity going through and that's really helped to at least push into 23 but we saw some of these numbers significantly decline into 23 you see that in development charges in the water sewer and storm any of those connection charges or anything related to

Construction in the water sewer storm fund you also see that in the permit department in the development services department we threw this one on this one we haven't brought back in a while um uh 2020 is the covid year uh this is hotel motel tax so this is the tax that we receive off of any hotel motel stays or Airbnb as well so any any short-term uh stay um we receive the hotel motel tax so the red line is the co year the blue line is the rebound in 2021 a 56% increase up to 1.6 million received the yellow line is 2022 this is a little unusual we also implemented the uh Transportation um uh the TPA I'm sorry the transportation Improvement or now I'm going to miss it um the it's an assessment yeah and so it's an additional cost on the on the housing so we have our TPA funds I believe there was confusion either on the um the ones that that are submitting it or do so these two months actually represent a lot of activity from April and March so um these are delayed payments and so if you take the line it would actually smooth out in here if you're able to actually grab the activity and put it back in its proper place um we bring this forward uh as an interesting uh note because what we see here at the tail end of 23 is we actually received more activity in 22 so October represents August this is August September and October where we had less tourism activity from overnight stays within the region so these are the uh some of those indicators that we're seeing just going into 23

or or what we've see feed into um the numbers in 23 we still had about a 4% increase in hotel motel tax but it was only about it only represented about 100,000 uh for an increase over the year so things are bit um slowing so the next portion of this presentation really gets into the monthly Financial reports the monthly Financial reports are attached as the to the agenda Bill there is a significant amount of activity within the monthly um reports and there's a lot of footnotes in there to try to provide um explanations of why uh why things are trending differently or why there was swings in the numbers so um hopefully everybody can look at those for for getting more of the details I'm going to share at a much higher level as to um what we're seeing and just some of the highlights for 2023 um so this just represents the city-wide revenues on the left and then the expenses on the right you'll see that revenues came in at 341 expenses came in at 348 the revenues were actually we received 93% of what we had budgeted in revenues on the expense side um we had spent about 71% of budget now this is everything that the city does so this is all 52 funds that are represented here so it's hard to glean any specifics it's more it's it's a lot better to dig in uh at the fund level to see what's going on so I won't spend too much time at this high level this is how you've seen it in the past the the gray bar is the budget the blue bar is 2023 and the black bar is 2022 so you see everything

trended pretty well in line with what we've seen in the past slight reduction in our uh grants and revenue sharing the last couple years we've received the covid funds and um this year we'll see um there was some anticipated capital projects with some federal funding that just hasn't come um through yet um on the expense side so um these also trended very well what we often get the question of though is is the big budget without expenses associated with it so um every year we um this is the first year of the B anual budget so this represents presents just the first year of the 2-year budget and from there uh what we do is is really budget everything that we anticipate that can happen from a project level so we'll see this when we get into the funds um but you'll notice that the um that services and capital Outlet really if it's a street repair if it's just a a grading that's more in a service um and then a capital outlay would be like a brand new street so some of these are some of the things that will end up in our Capital plan are also in services or in capital outlay I have a list right in front of me of 158 or 154 million in capital projects that we were able to accomplish 54 million and so uh which which is not short when we look at these numbers right here 41 million was completed in 22 and uh 37 million was completed in 23 those are actually pretty good numbers looking at the past we've had years of 20 million 25 million so uh some of the changes that have been made

within Public Works is to enhance the engineering department as well so that more can be planned and more can be built but that doesn't necessarily make this chart look better it probably extends this line but this these numbers will continue to grow because there's always a lot that the city is trying to do if you look at the tip if you look at the Pro Plan or any of the plans that come out of all the Departments of all the things that they're working on need to be designed permitted you need to line up all the funding and then it all needs to come through and you'll see these come out in big chunks though just like when we're talking about the bond funds with the facilities um a new poock building that was about 20 million in in almost just a a year so um a lot of these can be can be represented just in the and I'll talk to about a few of them at the fund level so you've seen this slide before the shadow box boxes are the budget and the Dark boxes in the front are the actuals and so when we look at this the street fund the reat fund the transportation fund the parks funds and even the housing funds over here they are all big project funds with a lot of things that they are trying to put in the pipeline and it takes some time to actually uh make those things come to fruition but it's not that they aren't actively working on them so and the and the public works department and and our housing um folks and in community Planning Development uh have done an excellent job of also

getting additional Grant funds we brought they brought forward the bridges that were bid earlier this year those are about 5 million each and those were fully funded with Federal Awards so you'll see a shadow box often on the on the revenue side because the expenses will be maybe one of those projects and then the shadow box is the revenue that will be the grant reimbursement coming back from uh from those projects so um all of these uh and just a quick example uh wurn operations uh James Street to Baker viw Telegraph are some of the streets uh we were talking about pollution mediation just a little bit ago all those pollution mediation sites are right down in here and there's significant amount each year kind of budgeted for how far we're going to get along on these projects that have been planned for I think Craig said he started working on it in 2012 so um uh that is anticipated to see those projects through this fund right here those future projects on we get to RG Haley and Cornwall uh like I said re was down 26% this year um so that's significant decrease on the on the housing sales side um and then um again these are heavily Grant funded and then also just building a pipeline to try to get that housing out the door and they need often with these you need the budget approval to be able to move forward and so you'll see a lot of these projects and it take might take not it might not get to it this bium but it's going to it's going to hang out there and and it's always a

process to try to move forward and get to it just need all those things to line up to get to those project phases uh special Road um yes Enterprise funds so these are our uh business type activities so this is water sewer storm are our big ones we also have medic one over here so this our ALS transport with Revenue coming from the county to operate the uh ALS units um these often are our our biggest producers here uh medic one had uh growth in overtime this year as as the fire department continues to work to try to get the right U number of FTE with the right certifications um in the different positions so we saw a significant increase in overtime in medic 1 this year um but we're hoping talking with the chief and you'll see it uh within the journal fund as well is they're working towards getting that right number of FTE and they're really hoping that 24 will be that year that they can cross that line development services we talked about what's going through the planning department you see that it's down this year that was down 10% uh from prior years uh and then some of the projects that went on with uh storm water little uh squal Estuary is here in the storm water um and then uh some of these projects I could mention that rotor lift station is about a $20 million project it's all budgeted for 2023 well 5 million was accomplished within 23 15 m milon is still up in the shadow box so there's a there's a lot that you're just you're working through these projects and there can

be some really high ticket items in these projects internal service funds so we bring up internal service funds because of the impact it has when we go back to the very first slides when we were talking about Citywide revenues and expenses we're about 340 million internal Services represent 60 million of the ins and the outs and it's really a lot of the internal activity so so when you're looking at the general fund and all of the people that work for the city um they're interacting often with these funds that are helping them do their job as the internal services so Fleet and radio fund uh purchasing fund uh fa facilities or all of our computers are going through the tech and Telecom fund we also move the IT department into the tech and Telecom fund um in the current year so they're no longer in the general fund um and then the biggest aspect is really the money flowing through the benefits fund we are self-insured um for for medical and Invision and dental so this is a big portion that you see go through the activity um general fund um and I apologize if I'm going too fast I try to keep it um try to get my 30 minutes but it's sometimes it expands out of that um so these are all slides you've seen before too I try to keep them uh very similar so not to confuse what we're looking at uh these big four the sales tax B tax utility tax and property tax are we consider our big four producers into the general fund that represents 80% of what we receive into the general fund um so

significant portion our sales tax B tax are most variable so uh with those we're really looking at that spending habits what we're seeing in that sales tax activity of of what to project and move forward with um uh as we move forward into 24 the rest 24 and then the next bum the 25 26 you'll see a reduction here uh the ground emergency medical transport the GMT funds uh this year there we had uh there was some changes to the program and and uh each month we had a modifier on where we reive monthly allocations of the GMT money this year there was concerned that that modifier might be too high and we might have to pay money back and so they remove the modifier as we work through the process process and then they true it up in the next period so we expect um to get notified in April uh for a June true up that'll hopefully fill in a lot of this Gap right here which could be about one to two million hopefully it's on the two million side for what we were missing from what we had budgeted on the GMT funds other than that everything trended pretty online with what we expected on the general fund um we've continued to see growth there was a lot of uh increases uh you know labor and employees are the main thing within our general fund it's really labor and benefits and then all the services that go along with those people to be able to allow them to do their job uh also in here though is 4 and a half million in arpa spending in the services um and some other projects that were more

maintenance side about over a million for Old City Hall and things of that nature that can get go into that Services Department we saw an 8% increase in labor this year um so we've had uh pretty significant colas over the last few years that have continued to increase um the cost um when it comes to the salaries and benefits Ling at them if you look at the revenues compared to the expenditures you'll see that there was 12 a.

half million more in expenditures than revenues um with that uh we received 99% of what we expected on the revenue side and on the expenditure side we spent 95% so on some of that that we um didn't spend we had actually allocated some funding um uh transfer over to watcom that will be seed money for about 1.5 million so that is still expected to go over there was also funding for the library that didn't um it wasn't they're still working on the design and to get that out um to get the the next portion of the library built um and then there's other aspects when it comes to some of the ARA funding that just didn't get uh spent in this year um but when you when you look at that um I'll will get into the actually what it looks like from a a beginning Reserve um aspect as well on on a couple slides from here so it it was expected it was budgeted we actually had even budgeted a greater amount of use and and that really goes along with just the amount of of needs and services that um were challenging to determine what level at the last budget session I I know there was always a a want for more there always always a want for more there's always a greater need in in all the different departments but it's it's challenging when we're trying to weigh out the revenue and what we have from an expense standpoint and then how to balance that out and with the arpa funds um pretty much allocated now we're looking at more revenue or we're looking more at just operating and how how to kind of

straighten the ship and make that right but we also knew we had adequate reserves to be able to draw down our reserves in hopes that the economy wouldn't be kind of what we're seeing right now in in some of those indicators we'd hoping the economy would would boost up or we we'd see different changes so uh we also have the uh departments this shows you uh highest level spend to the lowest uh and the red line basically represents kind of the 50 yard line if we're using um football terms terms um so we're halfway through the budget and so um nobody's over budget even if you're over the line so there's still another uh year to to kind of make adjustments and and correct things but uh this is just where we're sitting Midway through the year or Midway through the bayum and we have seen significant growth within our uh Public Safety departments with an 18% growth in in police and a 16% growth and expenses in fire uh so general fund Reserve so this um people can try to do the math at home but these numbers can change by the day so we put the day on I should also mention that this report was run off of February 8th numbers so at year end it takes a long time to actually close out the year and so um I could run these numbers today and I know that they've changed because we just received a big uh accounts payable associated with last year that we need to put back into last year and it's about 600,000 in AP so uh add about another 600,000 here on the AP line and you'll get closer to

where I think we are uh currently so what we take is beginning Reserve as a as a comparison at the very top at the 52 million um we will grab the cash line item so this is just cash that we have at 12:31 and then add in any accounts rece receivable that's likely to be received in a short period of time and then we deduct the big the big two ticket items are really accounts payable and acude wages that are the big significant aspects of what we deduct to come up with our basically beginning cash balance and so it's sitting in about 40 million again these are estimates uh based on the numbers we had at the time uh when we compare that to the reserves there's still 11.6 million that we need to spend in arpa funds so there's a lot allocated but we spent about 4.6 6 million this year it's been about 45 million in the previous year so we're sitting at 116 still left to spend and it's sitting there in the in the general fund and we're looking to spend a majority of that this year that has to be spent by the end of 24 or allocated and that allocation would have to be in my opinion through a contract yes I'm sorry did you remind me because um members of the public are going to see that 11 million and think it's just all available for wish list how much of that 11 million has been actually allocated and just not gone out the door because the expenses haven't happened yet yeah good question um we have some construction coming up all of it um so so repeating to the public even though you

see 11 million there um left over it's really not left over it's all ad allocated towards projects and it will go out the door so we don't have 11 million for a wish list of something yep y all of it's been brought forward to council and allocated to the three different buckets um that were were brought forward so a significant portion of this is for the library is is held aside for the library there's also about 2.8 for million for Mill works and also about um 1.6 for uh future acquisition around uh Bellis Fair as well so a lot of our are just are portions of other other projects that are just waiting to go on also some food Security in there as well of about uh almost 600,000 so C hoop so it looks like according to the graph our emergency Reserve has stayed about the same um over the last five six years uh and it looks like it's increased a little bit for 2024 can you explain that yeah so the emergency Reserve is based off of expenses within the general fund so it's 15% of the general fund budgeted expenses so it is going to change from year year um and so that is we've had growth in the general fund and that's represented by the growth in the emergency Reserve as well as that's that 15% it used to be 12% back in the day I think we learned a few lessons from the global recession and then uh the pandemic and that having that extra 3% is probably a good idea MH so you see the emergency Reserve is the is the red down here the uh unrestricted Reserve is about 10 million and

half million that that flowed through the general fund ask you a quick question there's nothing listed in 2024 under the legal Reserve is that because we've spent it or because we didn't allocate it or do we need to look look at allocating is there no expenses for legal no it's a it's a good question so that that was um restricted for uh environmental remediation litigation in that realm and so we actually brought that forward or it was part of the um package for the banial budget to move that into the environmental remediation fund where all of the environmental remediation was and so to consolidate um where that F where those funds could be used thanks for that reminder yeah all right so we've seen this chart before the blue represents Revenue um uh oh all right the blue represents Revenue um the darker blue is the uh actuals received and the lighter blue goes into uh projections and so the and then the yellow bar is the actuals and the orange goes into projections so we're just showing over time uh if we continue down this pace um without any changes without any ad um that will continue to to draw down into the emergency Reserve by 2026 so I mean oftentimes this chart looks like this because this doesn't anticipate any change and we always have to go back and evaluate change and so from there we will be evaluating um everything we can within our our Revenue structures or what other potential Revenue there may be but we'll also evaluate on the expense side um uh changes

that could be made or things that could be delayed so um this just is a representation of of uh you brought for has brought this before as we evaluate going into the next um budget cycle um that we knew like I said with the with the increased needs with the increased services that we're trying to add to to the city but we're realizing that the the revenue is not outpacing those needs and and what we've been adding uh for the budget so um and I'll I'll speak to that again uh here in just a moment but thought this was useful Forest actually brought this forward last time talking about the yield curve so a yield curve is um you have interest rates on the left side and then duration of time on the bottom so a healthy year yield curve you would have short-term rates would be lower than long-term rates so you invested in a one-year Bond you could get four and a four and a half% or something but if you lock that up for 10 years maybe you could get up to 5 % and so a healthy yield curve would slope up this is an inverted yield curve which means that the shorter term rates are higher than the long-term rates this believe this is the market expecting that you know long-term rates are actually going to be down in here this is just short-term inflation and where the federal funds rate is and the market expects it to go down so I bring this to your attention because um Forest actually brought the the comparison of the three-month and 10 year I believe last time um but the indicators that

I just was watching through our um fin we use financial advisors of Piper Sandler and there was an economic presentation that really uh was digging into some of these um in the last couple weeks and one of the leading indicators of a recession is really this two-year Mark compared to this 10-year Mark and so when you take this over time this goes all the way back to 1977 so if you take the 10e treasury minus the 2-year when that's negative you're below the line when it's positive you're above the line so each one of these blue bars represents a recession and the duration of time that the recession happened so every time the the 10 year has been lower than the 2-year it's been a leading indicator of recession you see it all the way back here in the in the 80s um dips below here and there's a recession dips below early for the dot bubble um then the recession and then the mortgage bubble um a session and now this was pre-co we were kind of talking about inverted yield curve and then um we got in Co they dropped rates there was a small recession but now we're sitting here so this hasn't been that negative in a significant period of time and so it's one of those indicators that economists are really looking at as to um historically this is this has been a leading indicator into a recession it's still we're we're in unusual times um we don't know what the future economy is going to do we don't know what the fed's going to do the expectation is that they may have their first cut in

the June meeting there is uh expectation that there might be three Cuts priced end into 2023 uh by the end of the year so that would just be a three quarters of a percent that would potentially be down to um from its current phase but economists are kind of split on whether there's going to be a soft Landing um you know income uh is uh unemployment is low um the job market growth has actually been good the jobs report for last week was 275,000 of new jobs so that that has been positive um in inflation has been reducing it's been kind of stuck at that 3% but it has been reducing um but some of those leading indicators for a recession are you know just what I showed on the on the 10 to two um also just the federal funds rate being significantly high and that continued borrowing rate that has continued High some of the other indicators I looked at too was the um the credit card uh debt that is outstanding continues to grow and the defaults on credit card payments so um that's just one of those other National in creators locally we're seeing our sales tax kind of leveling if not dipping on those two periods of time that I I showed you um like I said the borrowing costs are high and that's really leads to our our big generators of of Revenue what's associated with the motor vehicles and with construction and and with uh new building and everything that leads into that um and the cost of goods and and materials um continue to remain high so it's unclear uh what we're headed for but

we are going to continue to monitor the economy continue to evaluate our own uh finances as you see we're not at the bottom of the barrel when it comes to the reserve so we had put ourselves in a very very good position going into this bium and we knew by adding some of these Reserves to putting them to use that we weren't sure if it was going to have to be a temporary measure or or how we'd have to evaluate that and we were hopeful based on our just historical trends that we would budget at our historical Trend and not for a recession not for not for a plateauing we we we budgeted for a reduction or a slowing but we didn't budget in a recession and so we knew that going in we've we've messaged this um the whole time to to make sure that we knew there's going to be some potential tough decisions um Coming forward uh but we do have time to react and we do have um time to uh make changes um so with that uh some of these next steps we do want to bring our financial policies forward uh Financial policies we we still follow our financial policies but they were approved back in 2010 we've updated them we've tried to streamline them um we've um really stuck to the same principles but these are really Financial philosophies and just financial management priorities so they're not necessarily budget priorities they're just how we should manage the funds of the city uh to make sure that we're fiscally stable um and so we plan on bringing those forward in April uh there's more uh pieces

of that there's the debt policy there's the budget policy there's the investment policy um and just the overarching financial policies uh there's also the reserve projections that we have established more of those Reserve targets that we want to that we want to shoot for um also then in may we want to bring the first quarter financial review I want to try to bring the information to you as as quick as we can as as things are changing and then also looking to update Revenue projections as we move forward um into the into the future not knowing um just as we get more data because everything we see is is two months old and that is what I had for you today um any questions thank you director questions mquest so uh city council has kind of financial oversight right that's kind of our job um and so there's like two kind of basic questions an oversight body can ask you know are we overspending or are we under spending right because overspending can be costs are out of control or there's unanticipated costs and you you're you know things you expected are costing more than you wanted to and you've got to back off on what you're buying or buy differently right so overspending is a problem right when you're overspending your budget and underspending can be a different kind of problem underspending might mean that you're um failing to deliver or that things aren't moving forward or that projects are being delayed in in the execution so things aren't getting done so that's why you might

look for underspending the difficulty here is I see massive evidence of UND spending but it's of a different sort it indicates something different so I'm seeing on uh slide 10 you saw it and on page 182 you see $145 million of quote unquote underspending the budget and if you look over on page 183 you talked about this a capital projects $60 million quote unquote underspent and services 65 million quote unquote underspent but you explained at several points uh Mr Asen that UND spending in this case doesn't necess necessarily mean a problem like delayed projects or failure to execute part of that has to do with the fact that projects just take a while to execute not that they're slow to execute it's just that that's the time it takes to execute so there'll always be this apparent quote unquote under spending in addition you refer to the fact that we have a banial budget so we get full budget Authority for two years of spending and then you divide it in half or something and so it looks like you have Authority for spending but you quote unquote underspend so here's my question to you I don't doubt the truthfulness of all these numbers and I don't doubt that I and I I believe I shouldn't interpret this as underspending in the typical sense is but I still have that important question I still want to know when we do have the genuine kind of underspending when we really do have projects that are getting behind when we really do have executions that aren't occurring I want to know

when those are happening and I can't tell because there's in certain sense this legitimate and explainable UND spending right these budget deviations that are occurring that don't indicate a problem but I do need to try to identify I'd like to be able identify genuine underspending genuine delays in execution is there any way you could report differently or by some other means flag that to the city council it could be there's a major important project that is actually being delayed that really is problematic that really is a bottleneck and I think I should know about it and I can't tell how do you how would you suggest these Financial reports can be changed or your reports can be changed so that I might actually see if there is a problem with underspending underspending of that sort as opposed to this completely justifiable quote unquote under spending yeah that's that's a good question a hard one to um uh detail um when you're because some of it so much of it is Project based and and what projects are are lagging behind or not on track or not on schedule um and it's almost that the financial stats are in partnership with the the tip with the pro plan with um the comp plan that Tara and Sam bring forward all of these things are just the drill down version of of their funds and and how their projects are going and what um and so it depends on where the concerns are because from um often with all these capital projects there's not I guess they're not con concerning that they're

L there's generally a reason why they're lagging behind it's some sort of Permitting it's some sort of making sure that the right finances are lined up [Music] um I think that's something that we need to continue to evaluate maybe we can even kind of brainstorm what you'd like to see and what what those key funds are that you might want to drill into because the like I say at the at the 52 fund level at the at the Citywide level it's it's really hard to make an explanation of what all is residing within what was not spent out of the budget but then I have a uh five page five to six page uh small print um project list on everything that was uh planned on doing and it has a little bit of spending almost on all of the projects but those are the projects that are getting underway that need the budget Authority need council's approval to be will move forward on and need that ability to then seek out those grants that that might offset those costs um I think it's something that I'll need to continue to brainstorm I'm open to have conversations on how we could better provide that transparency to the council to the public um that would be meeting what what you're looking for can I follow up a little bit go ahead so I maybe it's not a question I just asking you as Finance director but maybe the mayor I'm trying to use a budget document to maybe ask a not a purely budgeted question which is how is the city doing in terms of executing on projects maybe what I really need to know is

where they where there significant delays and why they're signant delays and normally I might be able to look at a budget and find that but I'm I'm I don't think I can look at these budget reports and find that so my real interest I suppose is something more like hey when how can the city which has Council which has Financial oversight know what our admin you know problems that are really directly in under the administration or I'm sure that the project manager knows very intimately exactly which projects are delayed and why but I don't necessarily know and I don't need to know in every case but in major cases I do and how would I know when one of those major cases occurred so I don't know Kim maybe you can think about that too I really don't have any suggestions I just know that I want to feel fully capable of serving my role as oversight which means I need information which I don't maybe don't maybe have I appreciate that concern c um council member lilyquist and it's something that I asked the department head team it's something that's in my purview when I see what appears to be General kind of spending I want to understand that why as well so in our regular 101s and my mayor's report I can pledge good communication and along with the other communicators here at the city make sure we're keeping you informed um of of our progress and I think the question I appreciate the conversation on the underspend piece but likewise I think what I have in my purview right now especially

as we head into a new budgeting cycle is the overspend and how are we closing that Delta of 12 plus million out of our general fund between revenues and expenses so that's also also on the table here that's one Anderson thank you um I I had a conversation a little bit earlier with the mayor regarding overtime so I won't belabor that here I'll Trust over the next six months uh that will be monitored and hopefully reconciled so that we don't continue down that pathway but and this may not be able to be answered here and I tend to look at the budget a lot but once in a while something stands out and it's um maybe it's just my Spidey Sense is always worried about stuff but looking at workers compensation I I know that I I realize I don't know enough about how we determine what we're going to set aside and on page 195 um and thank you so much for the footnotes because you really do eliminate probably 10 questions by putting footnotes under here but one of the things was um footnote 6 was 750 K extraordinary workers compensation claim and corresponding 660 insurance reimbursement so I know the way we're compensation works somebody makes a claim there is insurance but sometimes there's a gap there's a certain amount of liability on the city to pay in a certain amount that we get back um and then looking at how much is in reserves and it looks like it's been revised um which I assume is to take into consideration the claim and the expense I just would like if not now but later

information on how is it determined how much we're going to be putting as far as reserves is that just the fees that we pay out through payroll and that determines it based on our percentage of payroll do we make a decision to put a certain amount in reserves for those unexpected large claims um I noticed on some areas nationally there you know there's claims for mental health PTSD um and I work worry about some of the services our First Responders are providing I know they're they're mentally tough and they're trained but with um fenol and overdoses and the response of dealing with what's happening on the street P plus Public Works having to do some of the um cleanup um there's even though with safe measures there's still um risk there plus um in our fire department we last year were informed that um a lot of their bunker gear and their firefighting gear has the P which is a highly cancer causing and so we we've had generational people utilizing that and you know we pictures of them swimming through fire retardant so my concern is the liability exposure over the next 10 years that we might see um different types of claims coming up and how do we prepare for that is our standard mode of looking at what reserves and potential liability going to bridge that or are we potentially going to over a course of several years have a really high escalation of claims and then not be prepared so I personally would like to know more about how are we predicting the potential of increased

claims coming up in the next 10 years and preparing for it given some of those uh those potential mitigation the potential contributors that weren't probably part of our plan five years ago so not expecting you to answer that now but it might be something to think about because I would really like more information on that and maybe other people might have a similar interest and maybe not yeah I know it's a very good question we are um definitely when it comes to any of our uh insurance or our um self- Insurance uh funds we want to make sure that we have adequate reserves for anything that may come our way and so with that we've been working with the HR department and um with uh discussion of we even were evaluating whether it made sense to go more fully insured on the workers comp but um overall we are looking to actually increase our internal rates as well and make adjustments and we even as we bring forward the financial policies I actually bringing forward the finan I was pulling them up to see what we had kind of starting to set those benchmarks and we're significantly increasing what we anticipate within the workers comp Arena so I'm not being an over worrier but you we're already kind of looking that direction yeah I appreciate a little validation that these things that keep me up at night is also maybe keeping some other people up thank you council member Stone thank you president Hamill so director gron I don't know if this would be request for you or if it would be

in coordination with the mayor and department heads but in thinking about right the projections that you're laying out and the possibility of like recession but also looking at those numbers and how right those reserves are declining if we continue along the same course um is when and how we have that discussion about where those right potential for new or other Revenue sources because my concern is yes obviously needing to you know make sure that we are lean and leveraging um funds effectively but at the end of the day our needs as a community continue to Rise um instead of decrease and how we meet that and so when things like the home fund right are coming forward for Renewal um and there had been discussion about a climate fund and right different things that are priorities for our community or are there other potential Revenue sources I know that yeah taxes are taboo and you know lots of conversations but the reality is is that the city doesn't do its work without those Revenue sources um so consider of you know there things that come up about like a vacancy tax or right are there things that maybe we haven't thought of before and I know that there's been Direction in the past like okay leave no stone unturned like how do we start those conversations so just wondering if that's something that in the short or Andor long term would be coming forward to council for you know discussion and consideration but just wanting to support I guess what you were alluding to Mayor Lind

thanks council member Stone and those are conversations that are actively ongoing as we've been continuing to monitor just kind of the state of the economy and our run rate as we head into the new BM is there other potential ways that we can increase Revenue um to do the work that we need to do and that'll be part of the conversation too but obviously that is something that we need to enter into with a lot of consideration and seriousness so one comment on that the um I just want to make sure that it's understood that the Delta is not that 12 and a half million so um there's a lot of one-time spending within the period and there'll be a lot of one-time spending in 24 as well but it is the operating that we need to align uh better with the revenues and expenses so that's an ongoing deficit at the moment that we're going to look to evaluate options committee further questions okay seeing none thank you for the presentation yeah thank you okay we'll move on to the next item uh old and new business I see none I just want to let folks know that the The Joint meeting of the um Behavioral Health and legal and Justice systems of the incarceration prevention and reduction task force is at 11:30 tomorrow and that's a a big group of people um we'll be discussing the 988 uh call system and some other items uh as it relates to to Legal um items that that that group is going to bring forward so just want to get on your RAR screen and uh we um we have transferred the uh committee meeting