City Council Workshops

0:00 Good afternoon. Welcome to Vancouver City Council. Today is Monday, October 5th, 2026. And this afternoon, we're going to start off with a state legislative draft, legislative agenda. City Manager, any additional information? Thank you, Mayor. As you know, when the legislature reconvenes next year, this is traditionally the time of year where we start to narrow down the scope of things that we want to prioritize for our legislative agenda. We're only able to pursue a limited number of items each year, and so we go through a process to identify which ones should be our top priorities. We've done some of that work, but always want to bring it back to council for your validation and vetting before we finalize that. So we're joined this afternoon by Catherine Kelly, our policy and program manager, and Brian Enslow with Arbutus. Arbutus Consulting, who represents the city in Olympia.

0:58 Good afternoon, Mayor and Council. I don't have anything really to add besides what City Manager just stated, so I'm going to pass this over to Mr. Enslow. Great. Good afternoon. Thank you for the opportunity to speak before you. I haven't been in this room since this new configuration. It looks great. You can't return to the same river. It's not the same when you're not the same, right? And so if I accidentally... If I accidentally call you Councilor Stoeberg, forgive me once, and then if I do it again, because you guys are flip-flop too, so. Anyhow, as City Manager said, we are here to provide just some context about kind of what the session's going to look like and some of the things from kind of the Olympia perspective. We do have a preliminary agenda and some agenda items here to kind of vet with you and get some input, and then just kind of briefly talk about what the staff process is going to be moving forward. And then interacting with you as a council.

1:58 We're about a month out from the elections now. There's some obviously very large social issues that this council is aware of, but there's also some meaningful fiscal issues on the ballot, particularly the millionaire's tax and whether that's going to be either repealed by the voters or upheld by the voters. And that clearly has significant potential financial impact. There's some implications for the state and its state budgeting process. I don't expect you to remember my presentation at the conclusion of last session, because I hardly do, but one of the points I made was the state kind of has a four-year budget cycle. Their current two-year budget cycle was predicated on existing revenues and transfers and things like that, where that millionaire's tax assumption is really key is in the year three and year four. So it wouldn't have...

2:56 It wouldn't have, like, instantaneous disruption, but looking out, it would create some very significant holes moving forward for the state if the voters were to repeal that. So that's kind of one of the biggest kind of fiscal issues on the ballot in November. And then also, you all are very aware of kind of your local elections and then the state. So every House seat is up this year, you know, half of the Senate seats. We'll see what happens. In November, based on the primaries, it's fair to say that it looks unlikely that there will be a significant change in the makeup of the legislature in terms of the majorities and the size of the majorities. It looks like the House will be retained by the Democrats. It looks likely that the Senate will be retained by the Democrats. And it also looks like they'll still have some large margins, if not even larger. But, again, a lot can change between now and November, and I'm sure we'll provide you some very...

3:56 significant reporting on that as it comes. Revenue continues to kind of... I think the last couple times I've told you it's been bumpy. I think it's fair to say it's some adjective worse than bumpy. The most recent revenue forecast was down about a billion dollars. Again, that's on a two-year biennial base of around 80. So that is not a... huge percentage, but it's still a significant number. That's combined then just generally with a corresponding increase in just the cost of providing the existing service. So when the state goes to put together their budget, they look at the revenues coming up, and then they also look at what's called the maintenance level, which is just to say, if I wanted to do tomorrow what I do today, what's it going to cost me? And this, you know, and those...

4:56 costs are associated with the cost of providing benefits to state employees and things like that. And the cost of fuel and energy and all those other things that have gone up for everybody, right? Much like our household budgets are challenging to continue to do tomorrow what we did today. Or, I don't know, I can't, you know, I don't buy organic milk anymore. I buy, you know, like, you know, the store brand half and half because those are choices we're all making, right? And the state is looking at that as well. And then... Some of the, kind of the, kind of the key themes that, as we talk with staff and as we've worked on our agenda and we think about what are the opportunities for the city as well, many of the same things that have been around are returning around housing. I think liability from a state perspective is continuing to come more into focus.

5:56 Washington state is somewhat uniquely positioned in terms of our liability exposure as governments. There's a complete waiver of sovereign immunity, there's a policy which is referred to as, like, joint and several, which means, like, if we're partially responsible for a negative outcome but we are the largest financial institution, then we are wholly responsible for it. And then, also, we have no control over the future, right? And then, also, we have no caps on, like, non-economic damages. So that kind of creates some fairly significant liability issues. And we've been seeing it with, you know, like, the rates, you know, our self-insurance premiums and things like that. And the state is experiencing it as well, particularly around some of their older, like, youth facilities and foster care system and, like, JRA and other, like, longstanding cases, which are...

6:54 So they are looking at that with a finer lens than perhaps they have in the past. And I think there's probably some opportunities for us to, like, dovetail with their concerns. Resources broadly, I mentioned that the budget shortfalls, I think there's going to be some challenges there. And, of course, as I mentioned, November, if, you know, if the millionaire's tax were to be repealed, that would clearly generate the need from a state. So I think that's a great perspective to look at resources again. And then, you know, AI and privacy and energy is... It's no longer emerging, but it is continuing to elevate in the kind of level of priority for the legislature. So with that, that's kind of the context. What was our framework? City manager mentioned NARO. I'm going to get paid 50 cents every time I say NARO. It's like...

7:54 Not a residual, but... And, of course, every time I put pressure on the system to NARO, it keeps expanding. So I haven't been successful yet, but I'm going to, like, we're going to try to continue to NARO and NARO. It has, in my experience, been a uniquely challenging environment to represent local government and kind of the ability to have... Kind of like a broad agenda and kind of not push those things through. But it's gotten much harder. So I think part of the reason why I'm encouraging everyone to kind of NARO our focus is because I think we'll have a better time being successful on kind of a fewer issues than perhaps in the past. We're quite... We have been pretty successful having a large, like, scatterplot approach where we can just say, let's try a bunch of things and see what sticks. I'm here in October. October 4th?

8:54 Is that right? 5th? It's 5th. Thank you. I'm here. I got the date right. I got the day right, even though I can't get the date right. But so we're trying to get earlier, starting earlier to continue to build to kind of get the delegation engaged earlier, to get the community engaged earlier, coalitions earlier. And, again, all with the... That we, me, and the staff team need to do a better job. Of doing everything we can to help make the city be successful. We're looking for alignment. I think I mentioned that on the liability issue. And there's going to be some other issues we talk about. Like, where can we find opportunities where we're not necessarily working against what's happening in Olympia, but we're working with. And then, again, we need to educate, recruit, and expand city champions, which is both within the legislature. But I also need to do a better job of working with...

9:54 You and helping you with the relationships you have and really utilizing those and focusing those and honing those in order for the city to be more successful. And that's somewhere where I need to do a better job. So that's kind of the context for how we were kind of putting this agenda together. I like buckets. I like to organize things. So we kind of try to... And so we try to kind of focus on a couple key... What I'd call... What I'm perhaps crassly calling buckets, but just like organizational frameworks. And the first one we have here is preserving core community services. And what I'm really talking about is how do we as a city continue to have the resources we need to do to focus on the essential functions that we already provide. And so some of those are revenue-related ideas. And then some of those are also then cost containment. And we have...

10:54 And the reduced local government liability again shows up here that's on the cost side. There's probably opportunities for additional cost driver savings that I have not identified. But some of the current kind of policy priorities that we've identified is looking at an additional city utility tool. I'm going to take a breath. And I don't want to... Well, actually, I do want to. I'm going to put city manager on the spot. I don't know if you want to jump in here. If you don't, we can just keep going. But I know this... This is something that I've talked to you about quite a bit. And I think that it might be helpful for them to hear from you just a little bit. Yeah. So one of the things that we would be specifically seeking is there's kind of two schools of thought around the state code where cities are given authorization to do utilities. It depends on whether you consider it to be prescriptive in that you can only have city utilities for the ones that are specifically in the code or whether or not those are examples. And cities can create additional ones beyond that. But as you look for the landscape of how local government is...

11:54 Is financed in other areas besides Washington, you can find examples of other types of utilities that have been set up. And one of the appeals of those is that rather than something like property taxes or sales taxes where the fee on, for example, on property tax, what you charge for property tax, doesn't necessarily have any relationship to that property's consumption of municipal services or the means of the people that own it. Utilities really give you the opportunity to do that. So we'd be looking for the state. We'd be looking for the state to add to the menu of ones that cities would be able to implement across Washington. Thank you so much. I knew Lon would do a better job than me. We've also looked at the Transportation Benefit Authority. There was a bill last year that would have kind of extended the weight in which it was applicable to, which really makes sense in light of kind of the electrification, easy for me to say, or...

12:54 Some of the heavy machinery that we're now using that actually is, you know, like just trucks and maintenance stuff that's now heavier because of batteries, quite frankly, would be captured under that and that if you kind of extend the top end of the weight collection higher, you would collect more revenue. And also, just the ability to apply it is running out, so we need to look at extending that moving forward to the future. And then I have kind of this laundry list of ideas. I'm not suggesting that we go after all of those things. What I'm suggesting is that there's quite a few opportunities to generate the ability to continue to support our core services that aren't necessarily property tax or sales tax. And why is that, Mr. Inslow? Well, you know, we've had property tax and the 1% cap on property tax on our agenda for quite some time.

13:54 We continue to be told by the governor and the legislature that that is not a politically viable solution. So some of this is we're listening and how do we pivot. We've seen sales tax options from the legislature as recently as last year with the additional one-tenth of 1% for child care services and things of that nature. And I think at the staff level, we were sensitive to two things. One, we're sensitive to just the general regressions. We're sensitive to the regressive nature of sales tax and wanting to be aware of that. And the second thing we've noticed is, you know, this we're talking about like just, again, trying to provide the service we provide today, tomorrow, and acknowledging that there's additional costs associated with it now and finding resources for that. One of the things that we've seen is sales tax authority or options.

14:54 Often comes with a duty, whether it's and you have taken up those duties many times, whether it's the mental health one-tenth or whether it's the housing one-tenth. But in some respects, that is mission creep, right? That is us taking care of our downtown because the other entities that we're supposed to perhaps have not met our standards, right? And things of that nature. And so those are some of the reasons why we haven't necessarily identified a sales tax. Or necessarily a property tax, even though you're like, those make sense. However, given those caveats, we tried to focus on some other options and tried to be a little bit more creative, quite frankly. So, Ryan, why fireworks? We don't allow the sale of fireworks in the city. So I think we need to take that one off.

15:54 Okay. The list. That's fantastic. There you go. Great. Before I advance to the next slide, in addition to the correction from the mayor about taking things off, which, by the way, I love the spirit of taking things off. So if there's other things that don't make sense, let me know. Are there things that I've missed? And I see that there's a hand up. Counselor Perez. Thank you. Ryan, can you elaborate on the vacant lands tax a little bit more and then consideration for commercial vacancy tax? Is that just a difference between the two and where you think both of those would fall? I see them as very similar. And so conceptually we're talking about is there support for housing or unhoused?

16:54 I see them as very similar. And so conceptually we're talking about is there support for housing or unhoused? By creating an additional tax on either just vacant parcels or commercial parcels that are vacant. I know there's been some conversation in the legislature about commercial vacancy. There's also been some conversation around just like underutilized spaces such as parking, what's essentially parking lots. So I see them very similar, I think, as the details would emerge. We would brief you on those. But I think generally I don't see a significant distinction in my mind between kind of the concept of what you're getting at and the outcome you're trying to achieve. Okay. Keep going. Great. Thank you. Planning for Vancouver's future. So this is kind of...

17:54 The ideas surrounding either kind of like how we're growing with respect to our urban growth areas and then also then how we're planning our existing footprint and whether it's redevelopment of areas or neighborhoods and density and housing types and things of that. So within that kind of like from a principle standpoint, like a statement is... We're looking to promote tools and policies that enable stronger cooperation between cities and counties within the urban growth area. And on the next slide, we have some ideas that support that. And then support policies that help all Vancouver residents maintain or achieve access to housing and community resources. And again, on this next slide, which I'm going to go to, we have some kind of specific action items. So one of the most critical ones is...

18:54 Extension of the existing sales tax credit for annexations. That was something that the city had championed several years ago. At the time, it was House Bill 1425. And we had worked to get a sales tax credit that would provide state resources to help incentivize us moving towards annexation. That is set to expire. And this isn't the work session to go through all the reasons why annexations have yet to proceed. But quite frankly, it's a necessary but not sufficient element, is what I would say. And then also, we've been looking at creating, advancing a pilot project that would actually allow cities like Vancouver to access that sales tax credit.

19:53 Prior to annexation. And there's kind of two schools of thought behind that. There's both the kind of infrastructure element, which, you know, as it is now, you would only receive the additional, the sales tax credit, you know, when you annex. Which means then you're responsible for all the infrastructure that isn't currently up to CINDY standards. And quite frankly, the, you know, potential consequences associated with that. So could we get a head start on upgrading some of the, whether it's sewer or septic or sidewalk or streetlights or whatever it is as appropriate prior to actually having to fully kind of bring that into the city?

20:40 There's also the labor side of it, which is there's likely a workforce that you're going to have to bring forward to meet, again, some of our responsibilities. And it takes a while to get people on and get them trained up. And so ought it not make sense to have some window prior to actually annexing that you can access those resources so that the moment you annex, you're actually more prepared and in a better spot. So that's some of the thinking behind there. And then I know this, Madam Mayor, I know you in particular. I know this council as well. We've had a lot of conversations around the Housing Trust Fund and how we have a number of incredible community projects. Yes, we do.

21:38 That are ready to go and are just waiting on state resources to make them a reality. I know Jeff's behind me. I know Alon's there. They can probably correct me. But it's over 600 units. It's just, you know, like, and so we know that that is a priority number one. So those are some of the ideas that we have identified for this specific policy area. And I'm going to see, do I ask? Yes, I thought so. Wanted to make sure. And so then we have some other ideas within this.

22:23 And this is kind of, we've worked with staff. We've expanded, you know, we've kind of just like, at some point, I'm just throwing it all out there and saying, here's some of the things we're considering. I don't know if there's any of these ideas that are specifically to resonate to you as individuals. That feedback would be really helpful. We're starting to get the state budget requests in. And there is. There is some additional funding for the CHIP program in the Connecting Housing to Infrastructure program within the commerce budget. So that's a good sign. But I don't necessarily want to go through all these items. But here is kind of a snapshot of the thinking from your legislative team and your staff team. Councilors, do you have any questions?

23:23 I'm the last. Yes, Councilor Paulson, go ahead. Thank you, Mayor. Councilor Paulson here. Brian, these are all, this is a great list. And I'm not against any of them. But some stand out for me more than others because what we consistently hear from the building community is how slow it is to put projects and how that also can then affect the pro forma. And today's interest rate environment, time is money. So as I look at this and I think about things that could help. And I think about things that could help with speed to market, streamlining SEPA at the top of the list as one of them, eliminating document recording fees for low-income covenants would help with the low-income math, development, STC waivers without backfill would be huge for us, TOD would be helpful, but then the last one, the TIF, tax increment finding authority, financing authority would also be super helpful. So I just wanted to underscore those particular items.

24:23 Because they stood out to me when I was looking at this list as ways that we could get speed to market for our housing. Thank you. Councilor Harless. The bullet you have there about regulating junk fees, is this specifically about like rental units or other junk fees besides that? I would have to go back to staff to understand that distinction. I didn't get this.

24:53 I thought it was a, I actually don't know now that you answered the question. I know that the legislature has considered various tenant fees in the past and addressed that issue. And I know that this council has had that conversation and broadly I would say the direction I've received from this council is to, with respect to fees and other costs, is to advocate for rental units. And I would say the direction I've received from this council is to, with respect to fees and other costs, is to advocate for rental units. And I would say the direction I've received from this council is to, with respect to fees and other costs, is to advocate on the tenant side, I would say broadly from a policy. I think there's some nuance there. So let me get, I apologize for not having that in my notes, but let me make sure I get back to you on that. Yeah, there's a lot of advocacy going on. I mean, there has been, but I've noticed specifically has kind of ramped up the last couple of months. And I know that I've brought it up here for us to potentially start looking at and maybe even get ahead of the state. A lot of fees.

25:53 It's, you know, instead of increasing rent, it's diverted to adding additional fees, which is one way that some landlords are getting around rent stabilization and whatnot. But it also, for me, especially as we roll out our rental registration, it's not really capturing the true cost of rent when there's all these different various fees throughout our community. So that's one way that I also look at it is having elimination of a lot of those fees. So that's one way that I also look at it is having elimination of a lot of those junk fees because that's the real data for what rent actually looks like in this community and sets an equitable playing field for all folks that are renters. And that is very consistent with what I feel I've heard from this council over the last at least 18 months, if not longer. Councillor Perez, go ahead. I did want to chime in a bit on the junk fees.

26:53 They're around the manufactured home areas and mobile home parks. I know that that's a big issue, at least from some of the constituents that I've been working with. The other point, and this might be something to monitor as we move forward with our work with the county regarding cryptocurrency ATMs at the ATMs and the community safety of our vulnerable elder population. I know. That surely we're not the only ones in Spokane isn't the only ones dealing with that, but I'm just wondering if that's going to pop up at the state level that for us to keep an eye on that, or if there's a different position we want to take as a city with that voice, again, monitoring what where the county is moving on that and where we would be so just thinking about that. I would love to get a list of those projects that you said that you're waiting for state resources.

27:53 Is that possible to just send a list of what those projects are? So Mr. Landy is behind me as well. I can't see if he has a laptop with him, but we do have a one pager prepared on that that has that information. So it's already done, ready to go, and we will make sure you have it by the more clear ones. All right. Great. Great. Thank you. Sorry, Mr. Landy. Councillor Stover, go ahead. Thank you, Mayor. Good to virtually see you, Brian, and like the new haircut. Several years back, the state passed a commercial PACE program, and I'm not going to be able to come up with what the acronym PACE stands for, but it's an energy retrofit financing tool.

28:53 My understanding is that the time Washington punted on residential PACE in order to see how it played out in other states, it's now up and running in 43 different states in the District of Columbia, and would love to get a lowdown of kind of where that's going to be in the future.

29:04 I would love to get a lowdown of kind of where that's going to be in the future, and I'm not going to be able to come up with what the acronym PACE stands for, but it's an energy retrofit financing tool.