The City Council study session of February 10th, 2026.

Clerk, will you please call the roll?

Deputy Mayor Bushnell.

President.

Councilmember Diaz.

Councilmember Hines.

Councilmember Palmer.

Councilmember Rumba.

Here.

Councilmember Sidalgay.

Here.

Councilmember Scott.

Here.

Councilmember Walker.

Here.

Mayor Ibsen.

Here.

Welcome.

Our first agenda item is the IT department overview.

I'd like to call on Department of Information Technology, Daniel Key to begin the presentation.

Welcome.

Good afternoon.

Thank you, Mayor, Deputy Mayor, and Council for this opportunity to present to you an overview of the Information Technology Department as part of your onboarding and prep for the budget this year.

I do not have cool swag like you did last time, but I do like to point out that you have a lot of wonderful devices in your hands.

And so whether that's a positive or negative, I'll leave to you about how we're doing with that.

So next slide, please.

So who you are, the information technology department is organized as a captive service provider for the broader city of Tacoma, including Tacoma Public Utilities.

And we provide a range of shared services and operate a number, probably about two dozen different products on behalf of the business to increase uh operational effectiveness, uh capacity and ensure the value and resilience of our technology systems.

Um we have extensive practices for both governance and decision making that help us stay in line with the rest of the city.

And by the numbers, we're about 10,000 devices and over 100 million transactions every year, each of those throwing off interesting data for you to incorporate in your policy making and operation of city services.

Next slide.

Moving on to some recent accomplishments, uh, we have a very active technology portfolio.

Uh, the city is really moving forward and increasing its operational effectiveness and transforming how we operate.

Um, these things range from generational software application uh migrations to weekly security patching and everything in between.

We typically manage about 20 to 30 named projects with project managers, scopes, schedules, and budgets, about three to four hundred new system features or capabilities every year, and 60 to 65,000 service desk tickets and requests for new items and service.

So there's a lot of volume coming through the IT department.

2025 was a historically large year in investment as far as the number of things that finished.

Not all these things started in 2025, but we had a lot of successes, including a migration of our city's enterprise resource planning system.

This is the large software platform that tracks all your money, your people, and your assets and interfaces with about 150 other services.

Originally implemented in 2003.

Uh, we finished late last year with an on-time and on-budget migration to a new system that should support us out through 2040.

Um, you've seen the new city website and the new city domain, giving us more security and trust and transparency under the Tacoma.gov domain, with that a new open data portal and access to maps, data, and applications for transparency and government, uh, increases in our internet bandwidth, including a 10x uh increase in our uh throughput, and including security uh capabilities around that, migration to Windows 11, permitting process improvements uh for both the home and Tacoma and utilities processes.

Uh, we also operate the public safety radio system for police fire and others and coordinate with other providers in the region.

And as you're all familiar with, uh, generative AI has been a topic, so there've been a lot of policy development, piloting, and exploration of those technologies just on our 2025 work plan.

So, plenty going on.

Next slide.

So, where we fit into the bigger picture of Tacoma 2035 and the council and communities goals.

Uh, as an internal service, uh, we're in the business of building capability and contributing to the operational excellence of the city.

Some have referred to us as the handle on the umbrella, and I'm starting to warm up to that concept.

Through partnership with other city departments, we do contribute to the full breadth of your strategies and goals.

I'll highlight just a couple here for you.

Uh, under the climate goals, we provide all your telework and hybrid capabilities for your workforce and the public, online business portals, including utilities 311 and permitting, and data analysis and presentations for things such as tide flats planning and uh urban canopy.

Under community safety, uh we provide the information around the dashboards for the Tacoma Public Police Department's crime dashboard and alternative response.

Uh we implement and operate body and vehicle cameras.

Uh we operate the public safety radio and interfaces with South Sun 911 and other data sources.

Around housing, we are involved in mapping and data analysis as well as the permitting process.

And around jobs in the economy, we have partnerships and edge for both employment and education with other regional entities such as UW Tacoma, the state of Washington through Maritime Blue, Tacoma Community College, Tacoma Public Schools, and Startup 253.

And not to leave out payroll and HR systems to make sure our employees receive their benefits and pay on time every couple weeks.

Regarding place making and experiences, we support backend infrastructure and front of house for both Tacoma venues and events and Tacoma Public Libraries to ensure that they have secure and sustainable services for their mission.

And we provide regional interoperation with parks, Tacoma Public Schools, and some limited public Wi-Fi access at city facilities.

Around transportation mobility, we're primarily in the data analysis business again, including housing the equity index, mapping and asset management tools, as well as secure infrastructure for Internet of Things and other utilities and built environment.

And so, really, under operational excellence, it's our job to manage the information and transactions for every employee dollar and asset that the city is responsible for, and we endeavor to make more possible.

So we generate tremendous value on your investment, but more directly under the next slide, you'll see us provide process automation, data communications, and consulting.

We manage digital equity initiatives directly, whether they're access, training, or advocacy.

We publish and maintain the equity index map, and we provide citywide technology policy lately around generative AI, but privacy and many other policies have come through the IT department.

So that's what we are doing today and what we've done for you recently.

Looking forward to our priorities.

Next slide, please.

Our strategy must be fairly flexible to keep up with the demands of uh 25 to 30 departments, depending on how you want to count.

And we capture those under four main pillars your digital workplace, data supported decision making, community and customer engagement, and operational effectiveness.

And I'll highlight just a couple of our emerging topics and priorities for you under each of these areas.

Under the digital workplace, this is where we capture most of our risk and need around cybersecurity and ransomware, making sure all of our employees are safe online and our systems are resilient and reliable.

And this is where the integration and adoption of generative AI for efficiency and effectiveness of employees really is uh the most prevalent.

Around data supported decision making, we are planning uh increased technology capabilities around our dashboards, including migrating to a new delivery platform to increase performance and availability of our online public facing dashboards, as well as enabling additional data to be available in those services, and content management for your processes and your committees boards and commissions.

Around community and customer engagement, we anticipate new work around the permitting process and public websites related to it, as well as changes for utility account management and ongoing billing.

And under operational effectiveness, we're starting a large initiative around utility asset management and process improvement, improvements in our financial accounting for transparency and efficiency, and improving our cybersecurity incident response.

So, who are we and what do we do?

So my team is here behind me today, uh and we operate ourselves in uh five lines of business.

As your technology director and CIO, I'm generally responsible for the strategy, governance, and risk management.

Paul Federigi, our chief information security officer is responsible for information assurance, which includes all the cybersecurity and compliance stuff you ever wanted to know.

Uh Kipling Morris is our Chief Chief Operations Officer, who is primarily responsible for the technology you touch and feel and the stuff that makes it run behind the scenes, including your digital workplace, radios, and core infrastructure.

Enzo Wong, our chief digital officer is your media, websites, data, generative AI, and a lot of point automation solutions.

Angelita Zoleta, who couldn't be here today, she's on the tail end of the flu, is our chief technology officer, really runs our core applications.

And so the city runs day and night because of her and her team's effort.

And Stephanie Autis manages our office as the CIO, which is our internal portfolio and project management, business services, and performance management.

And so on our current critical issues, where we're headed and adapting going forward, uh, of course, responsible and effective generative AI use.

We'll talk about this separately through council, our committee work and the council coming in months, likely in the second quarter.

Um we're also looking at generational staff turnover, like a lot of industries.

We had some folks hang on through COVID and the time after, and now we're starting to see those folks exit the workforce, and we're looking at some turnover and key roles over the next couple years.

We are subject to accelerating cost growth like everybody else in the city, both in hardware assets.

The generative AI boom is made memory very, very expensive, and so all of our devices are getting very, very expensive, as well as software service costs.

And like everything, our systems wear out, and so our pace of replacement continues to be high.

We've been had some excellent success in taking peaks out of the replacement cycle and making them an ongoing plateau and tableau, but our plateau, but we'll uh need to continually invest in maintaining our systems and making sure they're available and keeping up with ongoing cyber security threats, especially in a changing geopolitical environment.

So quickly moving on to how to work with us.

Uh as always, talk through the city manager's office or your staff.

Uh there, we're in contact with them all the time, and we can easily engage on any topic.

For anything you need that's broken, call and tag the service desk through your staff.

For new ideas, we have a separate intake process for that.

Next slide, please.

Opportunities for engagement.

We don't have a lot of cool stuff to look at.

We got a lot of documents and policies that everybody's really bored with, but please read them.

Uh we have a lot of dashboards, you see them all the time.

Uh that's behind the scenes.

We do have some infrastructure to come look at, you know, blinking lights and server racks and all that, but that's pretty much all they do, blinking lights and cables.

So uh, but we're happy to set that up if that's uh what you want to go see.

But mostly you'll see us here for technology access and equity issues, any sort of mapping dashboards or data analysis issues, uh, community facing technology changes, websites, portals, new automated businesses, compliance and policy related issues, and any sort of public safety communications.

You'll almost always see us at the table in partnership with somebody else because it's our tools that help everybody else deliver their mission.

Uh moving on to the financials.

Uh we've made some changes since the close of the last budget book, which is what you see here, but the general trends uh hold.

We are 100% funded by our internal subscribers based on the service that they consume from us.

Each of those services has its own description service level agreement and price tag.

Therefore, our contribution from the general fund or any other enterprise funds varies depending on consumption, but it generally ranges in the 20 to 30 percent rate.

So 25% is a good benchmark for general fund contribution to IT as an internal service.

Um, and our budget is also very quite variable.

We do a large amount of project work, and those projects come and go every year.

So you'll see some fairly large swings in the total investment in IT, depending on what the department's needs for new services are.

Um, but with that, um, thank you for the opportunity uh to present what the IT department is up to and how we contribute to your mission.

And happy to take any comments or questions.

Thank you so much, Jen.

Any questions from the council?

Council Ross.

Uh Mr.

Mayor.

Uh Daniel, you just had a whole presentation IT and SAP didn't come up one time.

So one time by euphemism, yes, thank you.

Yeah.

And so uh do you want to just talk a little bit?

My question is gonna be are we done with the SAP update or not, or are we looking at the next budget cycle of paying off the rest of it?

And for some of my colleagues who are on GPFC or maybe not have not heard SAP before, maybe describe what that is.

Excellent.

Thank you for the TF.

So SAP is a brand name and a product name for a class of software called enterprise resource planning or ERP.

So ERP is a general version.

SAP is our specific version, and people will interchange those names all the time.

Here they mean the same thing.

Uh so this is a suite of components and related infrastructure, which is the largest kind of single system we operate in IT, and it really keeps all the city's business information.

So all of our employee records, all of our financial records, all of our payment records, all of our utility assets, utility bills, and then it interfaces with approximately 150 other systems to extend that capability into other lines of business.

So it's a big deal.

Uh, the city originally implemented a prior version of SAP about 2003.

We've been maintaining it regularly and expanding its capabilities in the intervening decades, which is long for an IT asset.

They tended to last about five to seven years.

And we started a program a few years ago to uh create that lifecycle replacement and move to a new version.

And so, in some sense, yes, we are done.

We had a successful migration in November of 2025 to a new version of the SAP product, including all of our data migration interfaces with other systems, and implementing a brand new uh operating software for the utility customer services for their account management and call taking.

All that was very successful on time, on scope, on budget.

And so that's a major success on behalf of the staff here.

Uh citywide effort across multiple departments to get that done.

When we do the other half of your question, the other one we implemented in 2003, it was a big bang approach, and unimaginably large project compared to what we're doing today.

And today's dollar is a little over 200 million dollars, and about 10% of the city's discretionary labor was necessary to do the original implementation of SAP.

We did a project about 10 or 15% of that size this time to allow us to take our existing tools and technology and move them forward.

So, in a sense, we are at a stable place.

There is still more need out in front of us, but we've given ourselves the options to decide more often when and how to do that.

So we've taken a peek, created a plateau, and given ourselves an off-ramp every two years about when we want to take that uh investment.

And so you will see at every budget cycle going forward the next two or three options to make that investment in this platform going forward at the city manager and your council's direction.

All right.

Um question.

Thank you, Daniel.

And I think that comes to me.

So we had about 15% of the overall portfolio or be a part of it, and then there's other steps.

Like, what's the next big area of which we could be looking at?

Because I would imagine I mean, I don't know.

I mean, technology seems like it's different now than it was in 2003, and as much as we probably updated the iPhone from 2003 over and over again, we have brand new stuff now.

So, what's like the next area by which we would be looking at making major changes?

So, a couple things on that.

So, we weren't static on the old system.

So, it did have 20 years of updates, and so a lot of that incremental, you know, between you know pre-iPhone to now was already accounted for in the system.

It's a lot of stuff that the users didn't see, but it made the system run more effectively.

So the transformation wasn't quite as big as the 20 years might account for.

So we do have some options for when we invest going forward.

The next biggest topics will likely be around asset management and three particular areas of asset management around accounting, around the asset lifecycle management, and then field work as three distinct places within that.

And then there will be other opportunities around, including uh financial reporting and some continuing work around utility customer services, those will probably be the themes you see in the next proposed budget.

All right, I two more questions.

One more uh when you say asset management, it's not not that's not just things, correct?

Like what is the asset we say asset?

So the the scope of asset management that we're looking for for the next budget is generally what we refer to as fixed asset management, big things that are in a place that we own.

So utility substance, pumps, buildings, all that good stuff is the part that'll specifically be in scope, but you're correct.

Asset management is a very broad domain.

Okay.

Uh great.

Uh so that's good for us to be thinking about in the future.

Uh, my second question would be um my limited understanding and experience, but you know, something that started in 2020, 2003, you're taking a lot of behaviors, practices that all these organizations had, and then trying to like put them into the system in 2003, right?

And then I imagine there was lots of customization and lots of like systems that had to be built into the infrastructure, the IT instruction to be able to accommodate all that.

As we've moved into this new uplift, was were we able to kind of limit some of the customization of the programming?

We're able to kind of bring people on the same page around that just because I I only ask was from my my understanding is the less customization means the less kind of back end support we need, it's a cost saving on that end.

Customation means less things get broken, and also it means that when we try to uplift and do something new, it's cheaper, easier, faster if everybody's on the same page.

So I guess my question, with all that being said, did we really try to push away from customization with this new system?

Yeah.

So it's definitely it was a part of the program strategic goals and success criteria to reduce the amount of customization that's in the system and not expand our footprint of customization.

And it is true that a customized system requires more maintenance, care, and feeding, and special attention.

In some cases, it is worth the benefit that you get from it.

There isn't any other way to get there, but you really want to be clear-eyed about um what the impacts of that customization are.

So, in this migration, in order to manage our scope, and it really was one of our successes and being able to get done on time, is being very judicious about what areas of the city were transformed and improved versus what received a technical uplift, like your software operating system upgrade.

We're using it the same, but all the buttons moved, um, and it's on a new sustained system.

So we took two key areas around finance, our actual general ledger and accounting and utility customer services for transformation.

Most everything else went in intact in the way it was.

And in those areas, we very much did reduce our level of customization, or if we were needed something specific, we implemented in a way that was more sustainable through configuration rather than customization.

Yeah, okay.

I I think that just is we think about implementing technology, right?

Sometimes past practices uh get in the way of how we implement new technology, and sometimes we can make better headway if we're able to change practices.

And so I this I'm boring my colleagues and probably the general public with this conversation.

We should chat more about this.

May I add one more comment before we go though?

And so that really is the business opportunity with utility asset management and the diversity of business processes and the consistency rather than removing customization, but just the consistency could be a major benefit to us.

I'd love to learn more about that.

Thank you.

Thank you, Councilmember Hines.

Come from Councilmember Diaz.

Thank you.

Um I was wondering on slide five, you mentioned working on digital equity initiatives to help contribute to 4062.

I'm wondering if you can give any examples of what that looks like.

So over the years, we've had a number of digital equity initiatives.

So we've evaluated another opportunities to provide internet access directly through the public through public facilities and Wi-Fi, including with the link extension.

None of those systems are operated outside of our core infrastructure and the guest wireless that we have today, just because of funding considerations that come directly out of the discretionary general fund budget.

We partner directly with telco providers and other internet providers in the region to ensure that they're meeting their goals for access and cost control and relaying information about uh subsidy programs or other considerations.

Uh we work directly with Tacoma Public Library and others for training and digital literacy and general awareness of how to get online.

Uh we've partnered with Tacoma Public Schools for laptop access, especially when we all went home for COVID and there weren't supplies around.

So we participated in distributing over 2,000 devices in that era.

Um, over the last couple years, we've shifted our focus in digital equity from access to accessibility, and really our upgrade to the website and its ability to be translated and searched now, and including working through our other software systems to ensure that they're accessible to folks, is primarily where our activity is.

When I look at our intake of project portfolios of those three or four hundred things we do, about 10% of them are marked as contributing to our equity goals.

So beyond maintaining the equity index and that work, contributing to forms for services, new programs that other departments are operating.

We're providing their digital infrastructure to get those done.

Super, thank you.

That's a I just remembered, I can't remember which year it was that you came in with the presentation where you outlined a lot of that, and I just wanted you to be able to highlight it because it's a lot of very cool important work.

Um then I was wondering if there is something comparable that you have for how y'all contribute to the climate action goals.

Uh yes, we've moved that direction.

Uh so after we made our changes internal process around equity, we've just now started capturing uh where we interact directly with climate action and asking our partners internally whether this thing that we're doing contributes to our climate action goals.

So we're at the beginning of that process.

I'd have to do some research to be able to highlight specific examples for you, other than making websites and data available.

Okay, so it might be something that is included when we get the update from Christy's team on the whole climate action plan at some point is working, it's happening.

Yes, I guess okay.

Um the other question I had around the data equity accessibility piece was I know in my day job, which is a state agency, we are working on trying to make sure that our PDF documents they all have different accessibility features on them.

And I think that that was a state requirement, but I don't know if it's a state requirement of state agencies or of all entities or governments.

Is that something that y'all are working on?

Or is that something MCO would be if it is required of us?

We have a role in helping with that.

So there are multiple levels of requirements, you know, federal law and then individual agency or corporation policy in this case, the city of Tacoma's policy.

So do we do not as an IT department own our equity strategy and policy, but as tools come up, such as PDF reimagining or changes to websites or making documents searchable and translatable, we do engage and provide those services as needed.

Super cool.

Thank you.

Um, and then I think my last thought is more comment than a question.

I would argue that y'all are the wiring of the umbrella and facilities is the stick, but that's just observation.

We'll take our role, however, you want to see it.

All right, uh, with that, Councilmember Palmer.

Thank you, Mayor.

Hello, Director Key.

Nice to meet you I don't know if I've met you before, but nice to meet you.

Nice to meet you.

Um thank you for the presentation.

Um, I'm hoping you can help me understand it more around like the AI presentations that are coming soon.

You mentioned there's a couple of them coming up.

I'm curious what is referenced now when it comes to um the best practices around AI and then um what we're planning on bringing forward.

Sure.

So we were you have as a body haven't uh interacted with us directly on this topic since 2024.

So we gave a study session, presentation discussion around where the gender of AI technology was in the city's approach and strategy.

Since then, we have formalized our guidelines for how city staff should approach and use the technology in a uh managing the risk but still allowing experimentation and appropriate use and understanding how we were going to make decisions about what to use it for as an organization.

We've been operating under that guideline for about 18 months now, or 18 months since I talked to you, the longer since we drafted the guideline, and we're ready to formalize that guideline into an actual policy.

In this case, instead of interpreting existing policy, having policy that then staff are held accountable to.

And so that's the next step up, which is running that through our internal policy document uh adoption process with information and opportunity for comments and feedback from council at that level, but it's primarily administrative policy.

Any sort of strategy and how to use the technology is really a conversation between you, department leadership, city manager's office about when there is a problem or an issue or an opportunity.

Does this technology have a role in it?

And we consult directly with that business leadership to evaluate and support those initiatives.

So really it's not really a separate topic other than it introduces unique risks and capabilities that we have to make sure that our tools support.

It really is what is the application that you're thinking of, and then we'll help consult with that application in any given place.

So if there's a more specific question, I'd be happy to go further into that.

Because I was just hearing it was mostly administration that it's going to be applied to that's the current milestone, yes.

And then I I'm curious if there's room for expansion on that in like the near future around like our uh other city departments like police and fire and and those folks.

Yeah, so when I use uh administration, it really is all city staff and the services that we provide, not um office functions.

Okay, thank you.

Thank you.

Councilman Burumbaugh.

Uh thank you.

Um thanks, Daniel, for being here today, and I really appreciate um all the information that you're giving us on IT.

It's something that I you obviously know, I care a lot about.

I just wanted to kind of delve into the um financials by program.

It's on um, like it's after you got done with your talk, it's all the financial stuff.

If we could just talk a little bit about, I think that there's people in our council who maybe don't understand what how we fund um for radio infrastructure, and how does how does that differ from the funding that is all that's part of South Sound 911 for emergency?

If you could talk a little bit about what part we're doing and um where that lives at the city and how does it interact with what we do at South Sound 911, that would be sure.

So uh the public safety radio infrastructure and the operation of that infrastructure is housed as a subsidiary within IT.

So we have a separate fund for it, it runs as its own business, just like a little telecommunications company, and it is a hundred percent funded by access fees from subscribers and clean and a little bit of ancillary revenue from things like tower leases, like we release space on a tower to sprint communications, which is now T-Mobile, um, in a couple places, but really we're pretty much entirely funded by access fees.

So you get a radio, it costs you about $50 a month to have that radio and all the infrastructure behind it to operate at the service level that public safety, both fire and uh police require.

And so that is held in a separate fund.

About half of those service fees come from City of Tacoma departments, them paying directly into that, and about half of those come from agencies that are outside the city, other fire districts and police agencies near our our radio network core around the I5 core around Tacoma.

And so that is a self-contained business.

Um we interface a lot with South Sound 911 that is a public development agency, chartered by the Tacoma and our partner agencies that is funded via uh taxes and fees for service and dues from the members, so it has its own legal entity and its own budget.

There are cases where in their budget they choose to contribute to radio services or one-time funding, either in device replacement or offsetting access fees for the other radio services in the region.

But those are short-term one-time arrangements depending on Staff Sound 911's budget coming from their resources.

We generally have to operate a business that's whole on our own access fees going forward.

And so there's probably more follow-up there, but that's the basics.

How do we decide what that ask access fee is?

It just covers our costs.

So we have a certain amount of cost to maintain all of our licensing infrastructure and safety of our towers, uh, the radio service center for programming and ensuring that the devices themselves are set up and ready to go, and we look at our forward growth of costs and set a fee that will be relatively sustainable and not surprising our customers and just try to break even.

And how do we compare it to other cities for for access fee?

So there are there are three uh radio public safety radio providers in the county, and based on the subscriber counts, uh, infrastructure and economics, we do have the current the lowest access fee per unit because we have the density of subscribers within our service territory.

So meaning that there's more people in the city all really close together rather than some parts of the county that are spread out, so it's more expensive to do that.

Okay, we have a similar amount of equipment to the county system and many more subscribers because we cover the dense urban core.

Okay, thank you for explaining that.

Thank you.

Appreciate your presentation.

Yeah.

Our second agenda item now that we've uh heard from our T department is a revenue strategy and budget forecast update.

I'd like to call on finance department director Andy Charulo to begin the presentation.

And a Teresa Green, uh Office of Management Budget is also available too.

Good afternoon.

Good afternoon, Mayor, members of the council.

Uh my name is Andy Churulo.

I'm the finance director, and with me is Teresa Green, our assistant finance director and budget officer.

So we are here to provide you a revenue strategy update.

Um we're gonna start that with a quick review of 2025.

Okay, so here we go.

Um when we look at our general fund revenues for 2025.

Again, I want to give a caveat on this page that this is preliminary numbers.

We're still haven't closed 2025, but we're hoping these numbers are about um settle down to where they're gonna be uh for the year.

Um, and if you look at the bottom right-hand corner on this slide, you'll see a number of about 3.6 million dollars, which the good news is we ended the year over our projections by about 3.6 million dollars.

That's a good thing.

Uh now come the caveats.

Um we know that in our uh license and permit revenue line, it's about 3.2 million above our projection.

About a million dollars of that we don't believe we're gonna end up collecting.

It's uh billed revenue but not collected yet, and again, we don't think we're gonna get that, but um, even when you account for adjusting that downward, we're we're still positive for the year, which is a good thing.

Uh the other caveat is when you look at our big four revenues up at the top, our business tax, property tax, sales tax, and utility tax.

Um, again, we're seeing continued weakness in that world.

We keep missing our projections on that one.

Um, although here toward the end of the year, now that we have a full year of revenue in, again, our business tax seems to be lagging a bit.

Um, utility tax clearly is lagging.

Sales tax is a little bit off, but it almost got there and met our projections, so that's uh that's a good sign, but uh still a bit of concern for us overall that um again our big four revenues we still see uh some signs of weakness in that one.

Uh which the next slide here is an interesting table.

We've shown this to you before.

Um, this just takes our big four revenues, and it shows you how they ended every month we've been here since uh and we've shown this to you, like in I think we were here in June, and we were here in September and October.

Um this slide is not cumulative, so don't try to add the numbers up.

It just simply says, like at the end of May, what did our big four numbers look like?

Um so the takeaway from this this graph is none of these numbers should be red.

And all year long we have had red numbers on this chart.

Um so again, we've seen weakness in our big four all year long, which is um certainly concerning for us is as we head into 26 and we hope that this trend uh writes itself, and maybe next year this chart will not be covered with red.

Um we will we will see.

Um the next slide here talks about expenditures, and again, just a general warning that these are preliminary numbers, they may change slightly as the year uh as we close 2025.

Um again, if you look at the bottom right-hand corner, you'll see a number of about 15.5 million.

Uh that means that we had budgeted to spend 337 million.

We only spent 321 and a half.

So we are under budget by about 15 and a half million, which is again another good thing.

Um, however, here comes the caveat on this one.

We do know that a lot of the underspend we have will be spent as the course of this biennium continues.

Good examples of that are when you look at the neighborhood and community services line item and our non-departmental line item, those two together represent about six million dollars of that underspend.

All of those monies we do believe will get spent.

Um it's just a it's a matter of timing on how quickly they're getting out.

Um police and fire are another good example.

After our mid-mod adjustments, we uh got those budgets flush again.

Those budgets were both negative during our mid mod conversations.

We adjusted those upward again as 2026 rolls along.

We believe those numbers won't hold, and that's about three million dollars between those two departments that again we believe will be spent, and we might have to make further adjustments to those guys for overtime as time goes on.

So, again, when you look at those four departments, that's about nine million dollars in adjustments.

So, when you look at the 15 and a half on here, uh again, our our we're assuming that most of that will get spent as 2026 rolls on.

So that number will not be as big as that looks as we get toward the end of 2026.

So in summary, uh 2025 ended uh ended okay.

We beat our projections on revenues again with some caveats that uh some of that won't be collected, and we have some weakness in our big four.

Uh we certainly ended fairly well on our spending.

Um but a lot of that money will get spent as this biennium continues to go, and our departments spend on their programs.

This, as we start talking about uh again general themes and revenues.

This is just a reminder for you as a council.

This is a look at the last eight or ten years of revenue actions city councils have taken uh above the line in the black affect the general fund directly, below the line in the middle in the green are uh revenue actions that affect other funds, dedicated funding.

Um so when we look at the above the line of the general fund again uh cumulative about 18 million dollars in actions that the councils have taken to increase the money coming into the general fund.

A lot of that comes from our business license fee adjustments, but there's also things in there like animal license fees, and uh last year we did some exemptions related to our gross earnings tax on utilities that helped um add some additional run funding in the general fund.

Below the line, you see some fairly typical things that you're used to.

Tacoma creates is down there, that's the one-tenth of one percent for the arts.

We did uh councils did the one-tenth of one percent for affordable housing.

Um we see the EMS Levy Lidliff on there that was done.

That's about nine million dollars per year.

So, again, the ones below the line certainly add up to a lot more, but they are for dedicated purposes and don't necessarily help the general fund directly.

But a lot of revenue actions councils have taken in the past 10 years to help again address that kind of structural gap we always talk about of not having our our expenditures growing twice as fast as our revenues do.

Uh, and this slide talks about our revenue.

We've been showing this slide to you guys for a while now, and it's kind of a summary of all the actions uh that we were talking about taking in the past few years.

And just walking down this slide, you know, we started with the emergency medical services levy lid lift, that passed back in August of 2023, which certainly helped our emergency medical services fund.

Uh we went for a fire levy lid lift in November of 24.

That failed to pass by the voters.

Our streets initiative two was in April of 25, that did not pass.

Uh, you all worked really hard lobbying the legislature in 25 to change the the 1% cap on property taxes statewide.

Um again, that that certainly adds to our structural problems uh when uh 20% of the revenue coming to the general fund is capped at growing at 1%, and not one single expenditure we have in the general fund grows at 1%.

It it creates that kind of imbalance.

This got as close as it ever has to getting passed, um, but at the end it did not pass the legislature to provide some relief on that one.

Um Tacoma creates the the initial seven-year run ran, and you all passed that back in October to extend another seven years for art funding uh through creates.

In December, you all passed transportation impact fees, which again as those start rolling in will help.

They're dedicated to public works infrastructure uh related to development and growth.

Um so again, it does not necessarily help the general fund directly, but um, it will be additional revenues as those come in.

And this past January, you all uh passed the one-tenth of one percent for criminal justice and public safety.

Um we still have not received our letter back from the CJCT, the criminal justice training committee, uh that they've accepted our application, but we have our fingers crossed that they will, and we will begin uh to be able to collect this revenue in April of this year.

What remains on this list right now is we have the regional fire authority study that is underway, and later this year uh the fire department should be back to tell you all the results of what that may look like if that is gonna be a benefit to again taxpayers and service delivery for fire services or not.

And there on the bottom of this chart is our uh streets initiative.

Um, again, and that is uh they're working on again the timing and another run at the ballot for uh folks here to see if they want to invest in again improving the transportation network here in Tacoma.

Um so that is uh the the big summary of a lot of action uh taken in the in the past 18 uh to 24 months uh to to address uh some of the issues we have in our structural gap and the needs in the community.

Um I'm gonna turn it over at this point to Risa and she can tell you about again the budget timeline and how these two things uh connect.

There we go.

All right.

Uh we want to take this opportunity to talk about um the coming budget process.

So we are in a budget year and we'll be planning for 27 28.

Um the graphic here shows you uh a timeline of what this year is really gonna look like with the top bar on that being um what city council's focus really should be, which is providing the city manager um really strategic direction on any policy objectives or priorities that you all have.

Um do not wait until the budget is presented in October to make sure that the city manager has that full awareness so that we can incorporate your priorities uh into the proposed budget, which will be coming before you in uh October with the adoption of the final budget just before Thanksgiving.

So the second uh set of uh information on this chart is really when we'll be coming before council with briefings and uh public opportunities to have these conversations.

So, of course, today we're here talking uh an update on the revenue strategy.

Um we have put together a preliminary forecast that we hope to be able to share with you potentially as part of the retreat, but um maybe uh just in a conversation with the city manager that will be refined, and you'll get an official six-year forecast for the general fund in May.

And then we will uh work on getting a proposed balanced budget and then that updated six-year forecast and departmental work sessions.

Um, those will all be, of course, occurring throughout October and November.

Um, if those of you who have been on council before know that that pretty much takes up your holiday uh right before the uh Thanksgiving holiday is all of those conversations.

Uh during the same time, the city manager and departments are spending these first few months of the year uh working on uh baseline financials and preparing that forecast.

Um so baseline when we talk about that is we take what does it cost us into the next two to six years to continue doing everything we're doing today.

So we will look at labor costs and internal charges and contract costs and make those adjustments so that we understand what our uh structural gap will look like into the next biennium.

We'll spend the summer developing a balanced proposed budget in conversations with the city manager and departments, and then we will create that proposed budget document that you all will receive in that first week of October, uh, where the city manager will then present his uh or her, depending on who that person is.

Uh, we'll present their proposed balanced budget, and then by the end of the year, of course, according to state law, we do have to publish that final um budget uh adopted document and deliver that to the state.

And to not forget some of the most important feedback is what comes from the community.

Of course, the community can contact you all and come to council um meetings at any time, but we will have some very dedicated uh community outreach through city events, um a community survey, which is being led by the Office of Strategy, and we will have the um traditional kind of online engagement we've done the last few rounds with the balancing act tool, which will let uh community members make adjustments to the budget, either increasing revenues, decreasing expenses, and moving dollars around.

Um, and we will take that feedback into account through the summer and present that as part of the proposed budget.

So that is sort of what this year looks like for preparing the budget, and we're ready to answer any questions you all have about either piece of this presentation.

Thank you so much.

Council questions, Councilmember Sedoget.

Thank you.

Um that month over month, is that a trailing 12 month?

Is that why you can't add them up every month?

Uh you can't add them up.

So sorry.

Uh very good question, council member.

If you want to add them up, uh you would go to uh slide number two and look at the bottom there, and that's the cumulative total over all those years, the pluses, all the months of the year, pluses and minuses.

This just again in a particular month how it looked like when it ended.

Um so again, you could see like a big negative in the next or positive remote.

And there were positive negative.

I was just curious why there was such a massive swing from November to December.

It just seemed that um is there color you can give me on why because it sounds like we don't really know what we get until December then, because there was like some of these went from relative to positive, some of them changed a lot.

Just is there something around there that we need to be aware of?

We're trying to dig in the data right now and look at where our strengths and weaknesses are.

So again, I'm gonna look at sales tax in particular, because that one jumped around a lot during the course of the year.

I mean, look when I look at the variance in May and I look at the variance in December, it changed a lot, right?

We do know that in the intervening time the state changed rules on the B and O tax and the sales tax that it took effect generally in October.

We have a couple month lag on collecting sales taxes, so we're not quite sure if some of that showed up in our data or not yet, or we're still waiting to get it.

Um of it really again depends.

Like when we look in the business tax world as well, we could have things that we do that influence that.

We could have a refund that we give a local business because they come and that's what our tax and license folks do.

Look at a lot, and we have businesses come and ask for us to review their their taxes and see if we owe a refund.

So there's a lot of different noise in there.

We do see again, just when we think of looking at trends like in the in the B and O and the sales tax world, we see uh manufacturing in general is down, we see retailing in general is down, we see services is up.

Services have been a bright spot.

So taxes related to services have been up, but that kind of follows the trends in the national economy as well of you know, it seems post-COVID.

Uh, you know, we bought a lot of stuff initially after COVID, and then we started buying lots of services.

I was just curious if there's something we needed to know on a budgetary like standpoint.

But it, you know, at the end of the day, the two million dollars is probably just what one percent uh of what these revenues all I mean because if you look at the on page two, the 3.6 million on a budget of 315 million is just a little over 1%, right?

It's a pretty small number.

It's still our area of concern is typically again, we we when we build our budgets, we have relatively conservative estimates for these.

And so again, we'd like to be beating our conservative estimates, not seeing us missing our conservative estimates, especially by some of the the the size of some of these.

We we would like to see a better projection on these.

So what I'm looking at is this, I'm seeing that our revenues are within about one, one and a half percent of what we expected for 2025, which is half of our biennium.

We had roughly 15 million dollars.

So I'm gonna say what's that's let me do this four or five percent below spend, but you're saying that a lot of that is actually back into this year.

It's a timing issue, yeah.

That again, if someone like again, think of like we were gonna get a contract in place, the department was working hard to get a contract, and they expected to get it in September, and it might not have got it signed until December or the work done.

So again, there the the work will get done in the in 2026, and the spending will happen then.

It's just again, some of this is a timing delay on some of those things in there.

Got it.

So we were within about one percent of what we expected for last year.

Our savings in in last year isn't really a savings because we can't tell you what it is until we spend the money because we are gonna spend the money at some point this year.

So we should be expecting to be basically even at the end of this year, or I have to wait until May.

I hope it's again the good question is we will do our forecast, because again, once 25 gets closed and we have an actual solid year of data, that's when we look at our baseline and say what do we have to adjust going forward.

Um so the six-year forecast will give you insight.

Uh again, our goal always is to be relatively conservative in our projections for both you know revenues and our spending outlook, and again, beat those.

So we always like to come to you with a positive news.

If we come to you with really bad news, that means again, we're talking mid-year budget cuts and stuff, which we again want to avoid at all costs, because that you could you guys know how hard that can be when you have to adjust in the middle of a biennium.

Um, so but yeah, our goal is again here's here's a nice uh well-planned balance, relatively conservative budget, and we can beat it, meet it or exceed it in most cases.

Thank you.

Um what really helped me uh when I first became got on council was and maybe this is this would be my my suggestion for you for May when we come back and look at this.

The chart that literally just shows like our historical revenue growth versus our historical expense growth for um existing services to try to adjust for that noise in between.

Um we talk about this, I think a lot, or we try to talk about it with our constituents our our issue, whether it's two over three, two over four, two over five, whatever it is, our expenses don't our revenues don't increase more than about two percent a year, our expenses are usually three, four, or five percent, depending.

Um I would love to just see that as a chart so we can show over time, because I think this is an obviously it's an essential issue, right?

We call it our structural budget issue, but it's to explain to people, you know.

I understand we pay a little bit more every single well, we pay more every single year, but it's not at the level that allows us to keep some of those services at the same service level, right?

Because the the inherent concern that comes down from community is I'm always paying more.

Why aren't we getting any more?

And the hardest, I mean, obviously that's the hardest uh uh message is we are paying more, not at the level we need to to you know, stick to our values of of paying our employees what they're worth to um to do it right, right?

So that chart would be really helpful uh in May uh to review and to set that stage.

Thank you.

Thank you.

Thank you.

Consumer Hines.

Uh thank you, Mr.

Mayor.

Andy, I've seen this before, but I just want to ask a couple questions, which is um why was utility tax 1.6 million dollars under what we projected.

Uh that is mostly uh good question, Consumer Hines.

That's mostly related to our power utility.

They're um again having a his historically bad year in wholesaling that was again not projected in the numbers as cur again in as current conservative as our utilities project our revenues again.

This one is just a historically bad year that no one could predict, and that it's mostly related to our power folks.

I on the plus side in the utility world, uh, all the other utilities have exceeded their estimates, so it's offsetting some of those in power.

But um, we will have a conversation with our power folks and the and the projection as we head into you know doing our budget for 27-28.

Yeah, I mean, and I think but that's balanced off of a very large wholesale power year the year prior, correct?

Yep.

It is they've they've historically uh uh again when we look at the power, there's big swings in the wholesaling market depending on a lot of factors.

There's weather in there, there's uh global you know, prices for different things, oil, natural gas, all kinds of things impact them.

So it's it's uh it's a very volatile and hard to predict kind of world.

And yeah, there's a lot of volatility on it as well.

Some years they go gangbusters and and crush the estimate, and we get a lot of extra coming in there, and this is a year that just happens to be particularly down.

Yeah, I I highlight that one just to recognize the volatility too, to recognize when the utility sells power, wholesale power, we we they do pay get taxes on all those prof proceeds.

So there's a general fund nexus there.

I guess I'm when you look at the number, do they normally pay their does the utility pay their GET taxes at the end of the year?

It jumps from 265,000 to 1.6 million dollars from the November to December variants on utility taxes.

So do they just pay all at the end?

No, no, it comes in again.

A lot of these, depending on the cadence of the revenue collection, some come in monthly, some comes in quarterly.

Again, property taxes come in twice a year in a big way, but we get these trickles other times.

So we can certainly show you a chart on that one.

But that's a pretty regular pay on that one.

Okay.

Um that was my the one the one main question I had about this.

The other one was um just around sales tax swings.

And we just as a reminder, we get paid quarterly for state from the state for sales tax, or do they pay us monthly?

It's monthly, and it's basically two years, two months in arrears.

Um, so the sales tax we're collecting in February is actually from December.

So that's kind of again the Christmas season, but then when we look at police and fire, I know when the challenges in the past we're talking about overtime.

So am I to assume that they were able to keep themselves within their overtime numbers that we paid them that we gave them in the last budget cycle?

So mid-mod we trued them up.

Okay.

Um so again, it would seem again, they were a little negative, especially fire was at that time.

We gave them money during mid-mod.

Um, our hope is again that they can maintain that, but we do know that um again overtime again is hard to predict, and it can be a volatile thing as well on an expenditure, and so again, we have factored in that we might have to come back and talk both police and fire over time toward the end of the year as we do our end of the year cleanup.

So I'm gonna jump, I'm gonna bring something in from the next presentation to ask you, Andy.

But uh assistant development charges, if those are put in place, do they put get taxes on the system development charges the utilities take?

Uh that's a really good question.

And we might I might have to plant that to the next group that's coming up to talk to you all on that one.

Um but I can get you an answer on it though.

I'm actually having to think about some people coming up after you that might be able to answer.

Uh those are all my questions, Mr.

Mayor.

Thank you, Councilman.

Any other questions from council?

I have a few myself, and uh thank you, Councilman Ronz for asking my my uh gut tax question as well.

That was a very large variance, but that makes sense.

Power is just a really large utility, so big changes in one of its major uh contributing funds that that's gonna account for it.

Um so a couple of things.

Uh, this is a smaller um category question, but on slide two, it says licenses and permits.

Um my understanding is that licensing goes to the general fund and permits are a separate enterprise.

So can you tell me why they're categorized under the same bucket?

Uh good question, uh Mayor.

It's a it's a bad name on this one.

Again, we're kind of stuck with some of the names that we have in our system.

That really is business licenses.

Okay.

So the permit thing, yes, there is a dedicated fund for permitting that's separate than this, so these are not those permit revenues.

This really is business licenses.

Okay.

And other question is on slide number six, where we're talking about other potential concurrent revenue options.

My understanding is that alongside the fire authority conversation, there's also a bill in Olympia right now for allowing for greater flexibility for fire districts, not fire authorities, but districts, which could be encompassing just a single city or a current service area, um, which might have the same revenue implications in the in the sense of a fire benefit charge.

Um I don't know if anyone from GR is here, but that might be something worth exploring in terms of just flagging that because if there is movement, it is a short session, and were that to pass, then that could have very clear budget implications if we wanted to take a look at that.

Yeah, I'm I'm part of the uh regional fire authority feasibility study, and we asked the consultants that are on board to include their review of House Bill 2224, which is the one that you're referring to as an option for all the partners that are participating in the study, so that it's not necessarily a given that it will be regional fire authority.

The new um if that House bill passes, that might make better sense for Tacoma's service level and um cost to the community.

So they are evaluating that as one of the alternatives.

Very good, thank you.

All right, thank you so much for your presentation.

Oh, thank you.

All right, moving on.

Our third agenda item is system development charges once again.

I'd like to call on environmental services director, Ramiro Chavez, to begin the presentation.

Welcome.

Um good afternoon, um, mayor, deputy mayor, uh, members of the council.

My name is Ramiro Chavez.

Uh I'm the director of environmental services.

Joining me today is Kerry Birchard Juarez, water superintendent, and we have for you a joint presentation.

Uh, this briefing is a follow-up to the first readings uh on the proposed ordinances related to the system development charges.

This afternoon, we will present a joint and coordinated proposal, the result of close collaboration between environmental services and Tacoma water, designed to provide a the council with a unified framework for preparing Tacoma's utility systems for continued growth and higher density development.

As the city advances initiatives such as the Home Tacoma 2 and implements the long-term goals of one uh one Tacoma plan in the Vision 2035, it is critical that our wastewater, stormwater, and water systems are positioned to expand in step with development.

Meeting this future capacity demands uh requires intentional coordination between departments, sound infrastructure planning, and sustainable funding tools to ensure growth pace for growth while protecting existing rate payers.

Today's presentation outlines a funding strategy focused on system development charges for water, wastewater, and stormwater utilities.

This charges are intended uh to equitably recover the cost of new capacity needed to serve growth, support critical capital investments, and maintain fairness across our customer base.

At the same time, we recognize the council's commitment to housing affordability.

As part of this joint approach, we will also introduce a model framework for affordable housing exemptions designed to balance infrastructure funding needs with the city housing policy objectives.

This presentation again is intended to set the foundation for a shared policy direction, clarity how our departments are working together, and provide the council with a clear understanding of the options and trade-offs ahead.

With that in mind, I have a couple uh staff members in here, and Nathan Crane will begin the presentation for you.

Thank you, Director Chavez.

Thank you, Mayor, Deputy Mayor, members of council, for your time today.

I'm Nathan Crane, an analyst in the Environmental Services Rates and Budget Group, and I'll be presenting to you today on our proposal for adoption of wastewater and stormwater system development charges.

And I'm joined by Tacoma Water, and they'll be speaking to their SDC update ordinance that is being brought forward concurrently.

Next slide, please.

So as a reminder, quick quick review a system development charge is a one-time charge for establishing a new connection or upsizing an existing connection to a wastewater, stormwater, or water utility.

And the amount charged is proportional to how much additional capacity that new connection is requiring from the system.

And the intent is to recoup a fair share of the historic cost of the utility system to generate revenue for capacity expanding capital projects.

And most similar size to slightly smaller size cities in the Puget Sound region charge some combination of water, wastewater, and stormwater SDCs.

And Tacoma is a bit of an outlier in having neither wastewater nor stormwater SDCs in place.

And as you know, Tacoma Water does have water SDCs in place and has since the late 1990s, and they typically update their fee schedule on a five-year cadence, and they'll speak more to that as well in a moment.

So as uh Director Chavez uh mentioned, we are bringing forward these SDC ordinances because our wastewater, stormwater, and water systems need to build out additional capacity to serve greater population density and ongoing population growth.

And our utility rates pay for the maintenance of our existing systems, but they are not structured to fund our capacity upgrade needs.

Now, Tacoma Water already has SDCs in place to help address this funding need, uh, including in their larger service area outside of the city.

But the financial model that underpins an SDC program does need to be updated periodically to capture the current state of the system.

And for environmental services, our wastewater and stormwater utilities do not currently have SDCs in place.

Uh, with our smaller within the city uh service area already largely developed, uh, we have not had to focus on capacity expansion as much in recent years, uh, but zoning changes as well as the ongoing continued population growth have uh changed that, and we are now going to uh be looking at moving beyond some capacity thresholds in the relatively near term.

So, introducing wastewater and stormwater SDCs and amending the existing water SDCs will put our utilities in a better position to serve a growing city and county in the case of water using a well-established and equitable funding mechanism.

Next slide, please.

So, why SDCs and why now?

Um, speaking for environmental services, we are bringing this forward at a time when our wastewater and stormwater funds are facing multiple capital funding gaps at the same time.

And the big three areas are growth and densification, aging out of critical infrastructure, and proposed regulatory changes.

And at the same time, we know affordability is a major challenge for ratepayers right now as rising costs, continue to make it harder to pay monthly utility bills.

And inflation has hit both ratepayers and utilities hard with consumer and construction price indexes up around 30% since 2019.

Next slide, please.

So here's a visual depiction of our uh projected wastewater and stormwater capital funding gaps.

Our current capital spending trend is represented by the solid line on the bottom and our capital funding gaps where we know we're going to see increasing costs into the future are represented by the blue, orange, and purple dashed lines.

And these funding gaps are distinct and they stack on top of one another.

And gap number one exists because major components of both our wastewater and stormwater systems are reaching the end of their life cycle.

And going forward, we're going to need to spend more each year on replacing existing assets to keep our systems functioning in good working order.

And this has to do both with the historic timing with which uh major components of these systems were installed, as well as um hearkening back to the IT presentation earlier, better fidelity from improved asset management capabilities and uh better processes for transferring information between the fields and our uh asset management systems.

So uh we're gonna look probably at incremental rate increases to address this funding gap and bring that in in later proposals uh and that's gap number one.

Gap number two, which is what we're here to talk about today with system development charges exists because Tacoma is both growing and getting denser, and so we're going to need to upgrade our infrastructure to increase our wastewater and stormwater system capacities.

So, again, this is the gap that SDCs can help address.

Now, gap number three is for funding to meet future more stringent regulatory requirements.

We're tracking one specific regulatory proposal related to wastewater nutrient content that could have major cost impacts, and there will be other briefings to council and have been previously on this matter.

But this gap also represents the general trend of regulatory restrictions tightening over time, uh, which requires investment to meet those more stringent requirements.

So in summary, we are facing several distinct funding gaps at once or funding risks, and we believe that SDCs are the right tool to address specifically the growth and capacity related risk area.

Next slide, please.

Now, as I mentioned, we know affordability is a major concern for ratepayers, and at the same time, we will likely need to propose incremental rate increases specifically to account for the age out of uh of infrastructure occurring at an increasing rate in the near term.

And that's gap one again on the previous slide.

And this is a key reason we're proposing not relying on existing ratepayers to fund gap number two capacity upgrades associated with growth and densification.

And we actually surveyed residents on this in 2022, asking more than 500 residents across all council districts uh who they thought ought to pay for new sewer capacity that is required as Tacoma grows.

And respondents did answer overwhelmingly that new development in their uh in their mind should bear those costs.

In other words, growth should pay for growth.

And that is the philosophy behind SCCs.

Next slide, please.

Now we've also been doing our engineering homework uh to determine where we need to expand capacity.

And uh a major example on the wastewater side is we know we're bumping up against the capacity limits of our solids process and are going to need to upgrade those facilities.

And uh on the very cramped real estate of our central treatment plant, we're going to need to both place new facilities as well as relocate uh and replace some aging facilities.

And so that's going to have sort of a domino effect of facility relocations and additions that's going to be very costly and logistics intensive.

And the target date for this is around 2040, which is relatively near term in terms of major asset planning timelines.

And next slide, please.

On the stormwater side, uh, we've used engineering models to analyze the effects of densification on certain stormwater basins.

So the uh example in this slide is the Theafos waterway drainage basin.

And modeling a high growth scenario under uh the home and Tacoma projections with the associated addition of impervious surface area that that will cause results in substantially more localized flooding during heavy rainfall events, and specifically a three-fold increase in the number of manholes flooded.

And the picture on the left there can show you an example of when, for a major stormwater trunk main uh that flooding occurs, uh, the the results can be quite noteworthy.

Um we also know at the same time that we're anticipating more frequent and intense heavy rainfall events associated with the climate change, so that is just another strain on our system capacity that we are anticipating in the coming years.

Now, during midMOD, uh council did approve a budget request for a system-wide stormwater capacity study that will help us understand these impacts system-wide more holistically, and that's going to give us better information on where we can cite capacity increasing infrastructure like regional stormwater facilities, um, which SDCs could help pay for.

And uh, next slide, and I will hand it over to water.

Thank you, Nathan, and um thank you, Mayor Ibsen and members of the Tacoma City Council.

My name is Andrew Zaremba, and I'm an economist with Tacoma Water.

Um, like environmental services uh Tacoma Water, we're also doing our homework when we're looking out to the future and deciding what sort of infrastructure we need as we see growth in home and Tacoma and growth outside our service territory, particularly in um East Pierce County.

Um, when we were here for the first reading, uh council member uh Heinz asked about um you know, do our projections of our system development charges agree with and tell the same story as the integrated resource plan.

And the answer then and now is the answer is yes.

Well, the integrated resource plan doesn't prescribe particularly timing of projects or or you know, individual wells, for example, it does agree that out into the future uh Tacoma water needs additional sources, and there's a number of alternatives we can turn to as we look at our um our demand projections and our existing uh portfolio supply projections, and where we can get that additional capacity.

Some of that comes through expanded groundwater, which means additional wells, some of that is um uh Eagle Lake, which is a reservoir up in the uh watershed that we can tap into for emergency drawdown, um, additional storage facilities, which can act as sort of a a short-term supply.

We can fill them overnight and draw down on them during the day.

Um the additional water storage project phase two, as many of you may have heard recently, we've we've secured some funding uh for the additional water storage project phase one part two, which is uh uh requirement of uh fish passage, and that gives us access to uh significant volumes of water, um but there's additional phases to this that that would allow Tacoma to get even more uh water from our existing um from our existing watershed.

So what the system development charge model uh and the integrated resource plan agree on is um the need for expansion and need for capacity.

Um next slide, please.

Um so here are just some of the ones that are um included in the system development charge model that we most recently updated.

Um, the integrated resource plan is a very long forward looking document, something like 40, 50, 60 years.

Um, the system development charge by law is allowed to include up to 10 years of um of uh capital expansion related assets.

So that's what we have included here.

Um, what has been included in the new version of the model that wasn't in the previous one.

Some of the major things are what we would consider system wide requirements, think that everybody benefits from, and we think that um through our growth pace for growth philosophy that people coming into the system should pay a portion of things like pipeline one pressurization, which is a regulatory requirement by the Department of Health.

We have a 30-year plan to get that project done.

Uh PFAS treatment, which is largely going to occur on our well fields, um, which will uh I believe we're gonna be kicking off soon, but again, it'll be over 10 years and potentially even more as we bring new wells online as our uh populations grow.

Um we're breaking ground soon on the uh Tacoma Water Operations Warehouse, so um that is a very clear direct uh response to the growth that we've seen in our service territory.

Um, excuse me, like I mentioned, we have additional wells that we have a phased approach to bring additional sources online.

We're starting with the you know, most bank for our buck uh wells that gets us the most capacity for the lease dollars as we need to bring them online.

And then just the regular uh maintenance related update and upgrade of our existing infrastructure as that reaches end of life.

Uh we also have what we consider sort of like region specific require requirements.

These are most often uh storage facilities in um more outlying areas of our service territory or pump stations uh to ensure that we have proper pressures at some of these growing communities.

Uh one example is a an upcoming Cascadia Reservoir and Pump Station and then a second reservoir at the prairie ridge location.

That's sometimes referred to as the Tahole uh development area.

Uh that picture there that you see at the bottom was the first tank that was completed just last year and I believe had a final cost of something around $15 million that was fully funded by system development charges.

And this is sort of why projects like this are included in our capital plan and included in the model is we believe that uh those that are benefiting from these type of assets are the ones that should be um for the large part putting the bill.

So um these projects that are now included in our system development charge alone amount to about 225 million dollars in total costs.

Um again, we think of the ones on the right as things that should be fully funded by SDCs, the ones on the left partially funded based on you know additional capacity and incremental capacity.

Okay, uh next slide, and I'll pass it back to um Nathan.

Thanks, Andrew.

Thanks, Andrew.

Uh so this chart should be familiar to many of you who've seen our previous SDC and uh transportation impact fee presentations.

Uh it shows um the combined SDC and impact fee costs for an eight-plex multifamily development uh in Tacoma and in neighboring jurisdictions, and it includes Tacoma Water's final proposed 2030 rate, uh, if adopted, that will be phased in over five years.

Uh it also includes newly adopted transportation impact fees in the orange and the proposed wastewater and stormwater system development charges in purple and in blue, respectively.

Um as you can see, we stack up toward the lower end of these uh nearby jurisdictions in terms of the total uh SDCs and impact fees that are assessed for this development type.

Next slide, please.

Uh and council members have requested that we look at providing affordable housing exemptions for SDCs, and so we've been coordinating between ES Tacoma Water Legal and the Community and Economic Development Department to find a unified and legally sound approach.

And RCW 3592385 does authorize affordable housing waivers for SDCs.

Uh but these waivers must be funded by general funds, grant dollars, or another non-utility revenue stream.

And uh we know, of course, that general fund dollars are extremely limited at this time, so we've been exploring ways that we might leverage grant funds to offset SDC costs for affordable housing developers.

Next slide, please.

So in 2021, the Department of Commerce piloted a state-funded grant program called the Connecting Housing to Infrastructure Program, or CHIP.

Under this program, jurisdictions can partner with qualifying affordable housing projects to uh apply for funds to reimburse the costs of connecting affordable housing to utility infrastructure.

And jurisdictions that adopt or are planning to adopt an ordinance authorizing SDC waivers for affordable housing are eligible to receive uh chip grant funds to reimbursed waived SDCs.

Our community and economic development part department's housing division has teamed with qualifying local affordable housing projects to secure chip grant funds during each of the past three consecutive funding rounds.

Um if council does adopt or plans to adopt an SDC waiver ordinance, then affordable housing projects that meet both the city's and commerce's criteria could work with CED to incorporate SDC costs in future CHIP applications when funding is available.

The city's criteria uh includes a minimum 40-year affordability covenant.

And this would not be a blanket solution.

CHIP grants cannot fund every type of affordable housing, and uh projects that are eligible for chip funds must compete for those funds and may not be awarded those funds uh in those applications that city staff submit.

In the absence of general fund dollars or other funding sources, this is the best first step that ES and water have identified to reduce SDC impacts to affordable housing costs.

And developing an ordinance and the associated procedures to provide these waivers will require coordination between ES, water, CED, permitting, legal, and council.

With that in mind, ES and Tacoma Water staff recommend developing a separate SDC waiver ordinance in 2026 following adoption of the current three proposed SDC ordinances on February 24th.

This two-step approach would allow us to budget for SDCs if adopted during the current budget development year, while giving us additional time we need to put forward a well-researched and workable proposal for waivers.

Next slide, please.

And this just shows our uh our next steps.

So we are on the calendar for second reading on February 24th.

And if adopted, uh we would um do additional education and outreach um on the ES side to um inform stakeholders about next steps and environmental services would have an effective date of July 1st, 2026.

I believe Water's uh proposed SEC changes would be in effect at the time of passage of the ordinance.

If you could nod to that, Andrew, if that's correct.

Okay, yeah, that's correct.

Um yeah, so July 1st for the effective date uh for environmental services.

And next slide, and I believe that is the end of our presentation, and we would turn it back over to council for any of your questions or comments.

Thank you very much.

Appreciate the presentation.

Thank you.

Are there any council questions?

No.

Councilmember Rubble.

Um I was just talking with Councilmember Heinz, and um I'm just curious what the timing would be on that waiver based on approving this.

We will uh bring the ordinance uh before the year end, uh, council members.

Um there will be uh we will be exploring uh any retroactive applications, those applications that have been submitted after this, if the council passes for wastewater and um in stormwater, those applications they would receive after July 1st if they qualify, they will be eligible for those waivers.

Okay, thank you.

Councilmember Sodaga.

Uh thank you.

Uh I'm gonna start with water first.

Slide nine.

I think is the slide that really helped me when we uh discussed on uh water increases.

Uh on the bottom uh you say 225 million is for the above uh projects, but if I recall the total amount in that um review of capital uh project was a little over 300 million.

Uh thank you, Councilmember.

Yes, I believe the total amount was over uh 300 million.

I think these are the um we picked out the individual projects that represent the bulk the bulk of um of what we're talking about.

But if you're looking for a more comprehensive project list, we can provide that.

I just wanted to know it was roughly 300, 320 million dollars was like the total amount that was uh substantially higher than the last time the analysis was done.

And then I asked you the question of uh why uh or if it's not all of them, which one of these projects are the ones that basically were required to do because the state told us we have to do.

Um understanding is uh pipeline one pressure pressurization is a regulatory requirement from the Department of Health.

We've entered into an agreement to pressurize that pipeline of slightly over 100 million dollars, if I recall correctly.

That sounds sounds correct.

Yes, and then uh PFAS, I know there's some shifting um uh requirements at the federal level, but I believe that the uh Washington State Department of Health still has authority to set uh PFAS limits.

So um we are proceeding forward with those projects.

Um and I know there's there's still a lot of fluctuation in those um uh estimates as technology continues to develop for PFAS treatment, but that that would be another one that I would consider a regulatory requirement.

And the rest are ones we have to do if we want to be good stewards of our water infrastructure.

Uh that's correct.

There's been a long time need for the water operations warehouse to be expanded, and then well-field development is as as our population grows, we need additional capacity, we would start taking on those projects.

And the reason I point this out for the rest of my colleagues is um there was a massive increase in capital uh uh projects.

Half of them, at least half of it, is because the state basically said we have to um do that, and the other half is we gotta do it to be good stewards of our water infrastructure.

And when I saw those numbers come in, it made me much more comfortable uh with the water uh system development charges.

So I I do appreciate you coming back after the fact and um uh kind of clarifying that, because that's where I was drawing a blank on why we were doing such a massive increase, what happened that made it um uh such a big increase.

Um system development charges, I won't go through the entire long conversation we had a few days ago.

Um suffice to say um I am a little more comfortable now that we have uh existing structures in place.

One of my biggest uh concerns, even if we did this is to ensure that parts of my district that have felt left out in a lot of capital upgrades will be considered in the way we look at everything in terms of equity.

I understand we're gonna look at at basins of where things um uh go to uh but you know, given the atmospheric rivers events we've had, um the region wide flooding we've had, I think it's a testament that we have invested so far and that we need to continue to invest.

So uh I am I'm a lot more comfortable on the stormwater side uh as well.

I don't like having to have all these fees come in, but at some point we do need to find methods of um of paying for these capital uh upgrades.

So I want to thank all of you for the separate conversations we had and to put this together.

Thanks.

Thank you.

Councilman Hines.

Hey, uh thank you, Mayor.

And thank you all for coming back for the presentation.

Uh you know, uh just like one or two trying to think of my questions here.

Uh I'll start with water since Council Delga's already set that one up.

So when I look at region specific requirements, we have system development charges across the whole service territory.

So as we need to build a major infrastructure improvement in, say, Tehala, right?

But I'm building an 80 or 8 plus at the coma and pay system development charges.

So part of that is paying for capacity out there.

Um is that that that money just gets spread over the entire system, correct?

That that is correct.

And we we do have um, you know, flexibility, and as we're developing our capital plan and our financing plan, you know, how do we want to apply funds to these projects?

And and like I mentioned, the the tank that's shown here was paid fully with system development charges.

Whereas when we're targeting these other projects, we may say a portion of this project should be paid by system development charges because it is um because it's you know the existing customers are benefiting from it as well.

Um and and to to but to more directly answer your question, yes, as system development charges aren't um we don't collect it for a region and then only spend it on that region in the same way that um you know if a main breaks in uh in Tacoma, people and uh folks in Dahley are paying for that maintenance through their rates and and the inverse as well.

Yeah, I know I that makes a lot I I understand.

I mean when we think about the impact fee conversation, we had to do a nexus portionality discussion around developing a certain part, the con the fees paid had to stay in that general area, right?

So you could draw a nexus, but that is not how system development charges work.

That that's correct.

I think it's the um idea is that this is all interconnected system, and if there are um weak points in one part of the system that that can cascade its way down to other parts.

All right.

Uh that makes sense to me.

Um the I think the question I have is this I guess my probably for both of you all, and this is I think it can consideration.

So where I've been hung up a little bit.

Growth pays for growth as long as growth shows up.

But if growth doesn't show up, I'm paying for the infrastructure improvements that are gonna be required that we've outlined in here.

So when I look at the capital ES capital funding gaps, potentially I'm on the hook for all of those absent growth paying and buying down some of those as a ratepayer, correct?

So maybe um a couple of things on that.

Um the uh growth pace for growth.

Um we will not be charging anything if if if we don't see the development that we're planning to see at the city.

So um, and that's what we have uh assess.

Um but maintaining the infrastructure, that is something that all the rent payers will be uh entrusted to help us pay for.

And it's just the aging infrastructure of that, aside from the potential new regulations that might be coming down the road.

So the the managing the existing system and upgrading six the existing system will be part of the conversation with all the ratepayers.

Yeah, I mean, because I think there's a sewer is a good way just to start with it, right?

Which is we're seeing state needing to directed changes to improve our capacity.

Um we're seeing increased regulatory burdens, and part of the way we address some of that is the growth can pay for offsetting that impacts.

But if the growth doesn't show up, those two variables stay the same.

So my rates are gonna go up irrespective of the SDC charge because I'm still responsible for the end product, like that the sewer treatment plan is up to code and things like that, correct?

Uh that is correct.

No.

No, uh I think that's um it's something I've been kicking around, right?

When I look at the data, and I joke with Councilman Rumbaugh about this, but if you if you ask residents like, would you rather pay for the infrastructure you want somebody else to pay for the infrastructure?

I'm not surprised that the most people say someone else should pay for the infrastructure improvements that are required.

Um that seems pretty indicative of what I would think people would say.

Um and I just I think my my broader question has been around um at what point do you know at what point do when we ask growth to pay for growth and raise our costs, does that at some point shave off at least on the margins some of the growth we would need to see to pay for some of these costs?

And that's always been the tension I've been trying to land on, especially as we kind of have stated values as a council around affordable housing, around making housing affordable, around you know, that it we just did home in Tacoma to expand the number of housing units available, and then it seems like since then we've done nothing but try to make it more expensive to build here, and that's irresistible, and I don't get me wrong, I understand why the next you all done a wonderful.

I don't want to like say I don't understand why, I don't respect the work that's been here, but I I I am noticing very clearly we want more housing and growth through the zoning code, and at the same moment we're gonna make it more expensive to build at the same time.

And one of the reasons I've been advocating at the state level with the association of Washington Cities for the state to step in and pay more money for this is because we have two limited options for how we pay for growth when it comes to the system.

Number one, we make new development pay for it, which often makes it more expensive on the other end, um, which makes it less affordable, which is what we hear from the public all the time.

Like that's not affordable.

Yep, and we're making it more expensive.

Or we ask those costs to be paid off and paid for by our current residents, right?

And so I don't know if we've hit the right nexus here.

Um, but this is something I I'm continuing to kind of grapple with as we're going through this conversation.

Um I I would say with the fee stacking um comparison, we don't currently have school and park impact fees.

This is probably not for you all, but could the schools and parks in Tacoma do impact fees?

Is that within our control?

Uh that is uh within your control.

Okay, yes.

So I mean when I look at this, right?

I mean, while we are cheaper than university place, I mean we're we're not when you talk about just the city costs associated with it, right?

Because you're you're adding university places parks impact fees on top of it.

Um, and so I I do think we would move to be a little bit more expensive than they are at this point in time.

Um, I I think this is just a broader conversation.

I first of all I appreciate the presentation, and I think the chip thank you for coming back.

I was one who asked about waivers for um affordable housing.

Very creative idea.

I am I am concerned that we're gonna on the margin see some affordable housing developers left in the lurch on this because there's not enough commerce money to pay for all of our affordable housing developers, so we're gonna be kind of picking and choose there's gonna be some picking and choosing on who's gonna get waivers and who's gonna pay the full freight that exists.

Um and I do understand that we can't waive this without paying for it.

I would just posit that if we didn't have these in the first place, we wouldn't need waivers to pay for it.

Um so there's a there's something that's that's there.

Um but otherwise, you know, thank you all for the presentation.

Thank you for coming back.

I I still, you know, I think my questions around this is not do I think that you all have done your due diligence, do I think it makes sense?

Do I think it finds a way to address the impacts and costs of growth?

My question comes back to the tension around if we want more housing to build in our community, we want it to be more affordable, then why are we making it more expensive to build housing?

Um and maybe that's just the cost of housing being built, but that's just something I keep kicking around.

So thank you all.

Uh I don't even have any follow-up questions, thank you, Mr.

Mayor.

Appreciate it.

Thank you, Councilmember.

Uh, I have a couple questions myself.

So uh back to the question of cost on slide 10, where we're talking about our comparable cities.

Uh this might be uh information for a future member to the council, that's fine.

But um this is a comparison about relative fees um between us and pure cities for small multifamily.

Is there a similar comparison for off site improvement requirements?

Because to Council Member Heinz's point about cost, that's that's one of the relative pain points you hear from a lot of people in the building communities about is the off site improvements.

Do we know what the apples to apples is there for other communities versus Tacoma there?

Um maybe we can engage our um PDS uh department.

I think they would may probably have a much better understanding of what the offside improvements cost will be.

Um but certainly that is not part of the system development charge.

So you understand what you're saying.

Maybe we can follow up with a memoir.

Yeah, that can come from the city manager's office as well, because it's it's all just like the average voter doesn't look at a levy versus a fire benefit charge versus this, they just see taxes, right?

A builder just sees the overall cost and what pencils and what doesn't.

So that might be useful.

Uh what also might be useful in in that whole picture would be permit turn time and not just simply in-house like PDS, but also the the entirety of uh utilities, uh, different city departments, PDS itself, and just what is the aggregate turn time on your typical, let's say multifamily or single family residential permit uh compared to other cities too, just so we can have a complete picture.

Yeah, we can engage our um PDS and coming up with some answers for you.

Thank you.

And uh the other the only other question, just for clarification is for slide four, we're talking about the gaps in capital funding.

I'm assuming that part of what's forcing this conversation is due to the anticipated future costs and as utilities, you you have to budget for anticipated expenses no matter what.

So in the absence of some additional cost recovery mechanism, you're you're basically anticipating pretty substantial impacts to ratepayers, basically, in the in the absence of this, right?

Yeah, that that is correct.

If um the system development charges are not um you know approved by the council, um the department needs to bring a rate increase uh related is specifically related to capital improvements.

How much would you get to Bulberg?

I I I have no uh I wouldn't be able to tell you at this point.

But um, that is the the strategy behind it, it's just that element charges are not part of the conversation.

Understood.

All right, so basically, in the absence of individual projects paying for it, then John Q public, Jane Q Public is effectively subsidizing it.

Yeah, uh in a way that that is that is correct.

Um because at some point uh we need to build the capacity in the system to continue to approve those developments.

Um if we if we don't build the capacity, you know, uh I think we will be put in a very difficult position not to you know approve some of those developments because the capacity will not be there.

Certainly.

Thank you very much for your presentations.

Oh, I'm I'm sorry, Deputy Mayor, it looks like you have a question.

Yeah, thank you.

Uh this conversation's just sparked a question, is uh and appreciate you guys all coming back to us and working together on this.

Um, a lot of really good work in here.

Um just so is is SDT SDCs like the only option that the state's given us in order to, or is is this a state thing that like allows us to do this or not, or are there other options out there to kind of help with that balance that you know Council Member Hines has mentioned?

Because it it's we have to pay for this infrastructure somehow, and it's like our where are we gonna shift the cost burden is is really the conversation here.

Thank you for the question, Deputy Mayor uh Kerry Burchard Warez, water superintendent.

Um so your question is like related to development, or just in general?

Just in general, is is SDCs like the only option that we have uh in order to kind of help uh balance that?

Yeah, or is there yeah, so our revenue sources are rates, SDCs, and then any grants that we are or loans that we get from the state or the federal government.

Okay.

Or partnership fees, right?

So we have wholesale customers and we have other partnership type agreements, but those are all just to cover the cost of those various agreements.

Yeah.

That's right.

Yeah, I the first places that we would start looking before outright having a rate adjustment would be um would be looking for bonds and then bonds make their way into rates through debt service payments.

Um and one just one thing I wanted to mention, you know, what happens if the you know growth doesn't come for some of these projects, it you can sort of think of it as self-regulating.

If the growth isn't here, we don't do the projects, that way that we don't have to spend the money on those projects.

But there are some other ones, um, and I think in some cases environmental services and maybe a lot of them, is that you only get to put the pipe in the ground once, so you gotta make it you know big enough to take care of the people that are that are coming in.

So if we think something like pipeline one pressurization, that needs to be right size the first time because we may not replace it for another hundred years.

But things like some of these tanks, if the if the um homes aren't built there, then we don't build the tank until it's needed.

Okay.

Thank you.

And then um one other question I had was along the uh capacity, um the water capacity.

Um the additional water storage phase two.

Are we talking about Howard Hanson?

Just clarifying.

Okay.

Um I I re I um saw that we had received some monies.

Uh, there was some kind of con I think some money's pulled away, some money is put back in.

I'm just kind of curious of what's happening there and and how much capac if if you know if that project is seen to fulfillment, how much is that uh additional storage satisfy the need of the system?

Yeah, it is a little confusing.

So that is actually core of engineers project.

Uh we are the non-federal sponsor, so we're partnered with them, uh, but they actually are gonna own and operate that facility when it's complete, and they're also responsible for the engineering and construction to deliver it.

Um they have received incremental funding from the federal government of 190 million dollars, which allows them because they already had a contract in place.

Um, it allows them to actually proceed with construction this summer, um, which is great for them and for us because we will be receiving some of the benefit of that project through additional water supply.

Um we are um anticipating having that additional water supply as part of our integrated resource plan and our long-term projections, um, but we're it's not our only source of additional um water supply.

So it's we consider it to be an important part of our mix, um, but it's not make or break.

Um we have other sources as well.

Okay.

Yeah, and I think diversification is really important.

So there's no one specific source that you're overly reliant on, so that way we can make sure we have resiliency in the system as a whole.

So definitely appreciate that.

All right, thank you very much.

Thank you, Mayor.

Thank you, Deputy Mayor, Councilman Palmer.

Thank you.

Um, I just wanted to thank you all for taking so much time and helping bring me up to date on what this is all and why we need it.

And I think I talked to you no less than three times between everyone here, so I really appreciate that.

And then I guess I wanted to just flag for my coworkers, my colleagues, that I think there's another conversation to be had on top of this, where we're talking about um, you know, things have kind of changed and and allowed people to manage some of these things um on site, right?

So if there's wastewater, what are some creative things we can help our residents do in order to take care of those or clean those um on site?

There's stormwater gardens, all sorts of things.

Um, and the same or sorry, so for stormwater and then for wastewater.

Um, there's other options too that we could talk about about technology and different types of toilets and all the things, and so I think there's more of a conversation to be had on yeah, these are these are the projections as to the growth uh if things continue business as usual, um, but if there's other creative ways that we can help mitigate some of these um growth issues, then that's worth talking about.

Thank you.

All right, well, seeing no other council questions, so thank you very much for your presentation.

All right, next up is other items of interest.

Our fourth agenda item is a council consideration request for the OASIS Youth Center, HIV and STI self-testing for LGBTQ plus youth.

I'd like to call on Council Member Rumbaugh to begin the presentation.

Thank you, Mayor.

And uh I want to say this.

Um I want to thank my co-sponsors right away, um, Councilmember Diaz and Councilmember Walker for co-sponsoring this council contingency request.

Um council consideration request.

I um I want to say that this has been a long time coming.

I've been talking about this with um OASIU Center for over 18 months.

Um since Pierce County AIDS Foundation left our city, and they um were responsible for much of the testing that took place.

Um money was from the Department of Health.

Um we just have not had we have not had a place for youth to get those tests.

And the other, I just I'll read through what I have, but I just wanted to explain why I'm here today because I think this is really important.

Um I ask for your support for a council contingency fund request of $30,000 to fund the OASIS use centers, HIV and STI self-testing for LGBTQ plus youth ages 14 and older in Pierce County.

Um Pierce County is considered a high STI incidence jurisdiction with rates of chlamydia, gonorrhea, and syphilis exceeding those of many other counties in Washington State and nationally.

In 2024, Pierce County reported the second highest number of cases of chlamydia, gonorrhea, and syphilis off stages in the state with young people ages 15 to 24 accounting for the majority of chlamydia cases.

Despite this elevated need, existing HIV and STI test services are often not accessible or culturally appropriate for youth, particularly LGBTQ plus youth and youth in crisis due to barriers such as transportation cost, age restrictions, stigma, and lack of affirming providers.

OASIF Youth Center will provide on-demand staff guided HIV and STI self-testing within its existing drop-in and support service environment.

This request will provide funds to administer 300 tests.

And I want to thank again member Councilmember Diaz and Walker for co-sponsoring, and this resolution is coming to council for a vote on February 24th, 2026.

And if you have some questions, let me know.

Of course, it looks like uh we've a few council members signed in, starting the deputy mayor.

Oh, thank you, Mayor.

Uh and thank you, Councilman Murphy.

I have heard you uh talk about this for for a while now, so thank you for bringing this forward.

Um, this is a really important uh issue that is facing our community, and so I was I this sounds like it's a start.

Um I'm just curious of what um I said, but it's gonna be an ongoing need.

So I was thinking about well, how do we get this started, but then how do we continue to sustain it moving forward?

And I was thinking if I was wondering if you had any thoughts or ideas around that.

Thank you.

Yeah, I think that um thank you so much for that question, Councilmember Bushnell.

I'm I'm my thoughts were I really want to go to Pierce County because they have cut back um about 240,000 of funding to OASISU Center.

Um, and I'd like to talk to them about how they might bring something like this back as something that they could fund.

I think I need to talk to count Councilman to Councilmember Hitchen about it and see which ideas she has.

If you have some ideas, I'd love to know what you think.

Yeah, well let's brainstorm and see what we come up with.

I think finding some sustainable model to support this is really important.

Yeah, thank you.

Thank you.

All right, uh, Councilman Palmer.

Thank you.

I think it was around the same thing.

I think this is fantastic.

Um, but I'm looking at okay.

This is for all of Pierce County.

How can we encourage you know, other folks around Pierce County, other jurisdictions to um chip in and so love to brainstorm with you around that?

Let's do that.

Thank you.

All right.

Good ideas all around.

Thank you.

All right, well, again, uh really appreciate you bringing this forward, and uh thank you to the co-sponsors too.

Moving on to item number five, agenda review and city manager's weekly report.

I'd like to call on Deputy City Manager Alison Griffith to begin the presentation.

Thank you, Mayor and Council.

Um for this evening's meeting.

There is one ceremonial on tonight's agenda.

That's proclaiming Tuesday, February 17th as lunar new year.

Um, there are no modifications to tonight's agenda.

There are two opportunities for public comment this evening.

One under regular public comment regarding motions, resolutions, and ordinances on tonight's agenda, and one under community forum, which is items over which you have jurisdiction.

Please let us know if you have questions before this evening's meeting and for your review attached to your study session agenda was the weekly report.

Thank you.

Thank you.

Uh I would now entertain a motion to convene to an executive session, RCW 42.30.110 section one G to discuss the qualifications of an applicant for public employment not to exceed 30 minutes.

So moved.

All those in favor to convene to an executive session, signify by saying aye.

Aye.

All those opposed saying.

Motion is declared adopted.