Washougal City Council Workshop: Development Code Updates and 2027-2028 Budget - September 28, 2026

The Washougal City Council met in a workshop on Monday, September 28, 2026, at 5:00 p.m. via Zoom. The agenda covered the consolidated development code update, the statutorily required preliminary 2027-2028 revenue and expenditure estimates, and department-level budget presentations. No official minutes were available; this summary is based on the agenda and the raw transcript. No formal council votes were taken. The workshop adjourned shortly before the 7:00 p.m. regular council meeting.

Public Comments & Testimony

• One audience member reported that an encampment near the brush and beach area had been moved out but relocated to a nearby area. The speaker said a brush/security concern remained because the beach area is not visibly clear unless someone walks down to it.

Discussion Items

Community Development: Consolidated Development Code Updates

• Community Development Director Mitch and consultant Jessica presented the consolidated code update, emphasizing that they were not rehashing all updates but reviewing changes made after prior council and planning commission feedback.
• Regulatory drivers were grouped into three categories: state-mandated periodic update housing requirements (middle housing, ADUs, co-living), the critical areas ordinance update tied to best available science for riparian areas, wetlands, and Oregon white oak, and recommended code updates aligned with the 20-year comprehensive plan growth strategy.
• Process status: the city issued a mitigated determination of non-significance under SEPA; the SEPA comment period concluded September 18; the city is in the middle of the 60-day notice to Commerce; hearings are scheduled before the planning commission and city council in November; the council is targeted to take a single action on December 7 on the comp plan, code updates, and parks and transportation capital plans.
• A middle housing table was presented showing permitted and prohibited housing types across residential zones. State law requires Washougal, as a tier-three city, to allow two middle housing units per lot and five middle housing types. The city is also proposing triplex and fourplex allowances in higher-density zones on larger lots to increase housing opportunity without rezoning.
• Council members asked about HOAs and CC&Rs. Staff responded that the city cannot enforce or regulate private covenants, so a property owner would need to resolve HOA restrictions privately; staff noted the state legislature could change that landscape in the future.
• Several council members questioned triplex/fourplex allowances on hillside residential areas such as Lookout Ridge and Woodburn, citing topography, traffic, and neighborhood character concerns. Staff replied that the allowances are permissive, that parking and other site regulations still apply, that the strategy avoids rezoning, and that the city needs both town-center density and middle-housing flexibility on the hill to meet the 20-year housing math.
• Staff explained that multifamily is being redefined as seven or more units; buildings with three or more units remain permitted where apartments were historically allowed, such as Woodburn Hill.
• The lot performance table for residential districts includes a new minimum density, sets maximum density on a square-feet-per-unit basis so two units fit on a minimum lot (for example, two 2,500-square-foot units on a 5,000-square-foot lot), slightly increases maximum lot coverage, and clarifies that state law requires two middle housing units on pre-existing lots regardless of lot size. The table also establishes one primary residential use per lot, preventing two duplexes or two detached single-family homes on one lot.
• A new unit lot subdivision chapter was discussed. It is state-required, applies to single-family homes, middle housing, and ADUs, is proposed in residential districts, Woodburn Hill, and Town Center, and allows units to be sold as separate lots. A unit lot cannot be further divided; the subdivision can occur before or after construction.
• Low-income housing impact fee incentives were reviewed. The city is updating its existing program, scaling exemptions by affordability level, and limiting exemptions to 80 percent so the city does not have to backfill exempted fees. Permanent supportive housing falls in the zero-to-30 percent affordability range.
• Park and transportation impact fee rates are being moved out of code into capital plans; an annual escalation is being considered. Finance staff said updated transportation impact fee numbers will need to come back to the council because six-year TIP construction costs and funding assumptions changed for projects such as 32nd and Shepherd Road.
• Fire and school impact fees must be updated within six months of plan adoption; fire fee updates are expected in 2027. The new regional fire authority will likely develop the capital facilities plan, with the council adopting resulting fees.

Finance: 2027-2028 Budget - Revenue and Expenditure Estimates

• Finance staff presented the statutorily required preliminary revenue and expenditure estimates for the 2027-2028 biennial budget, noting that many numbers remain subject to refinement through October.
• The budget approach builds on the May council planning session and the city's strategic plan, continuing investments such as the small business education and networking program, partially moving positions off the SPIF fund, and completing the comprehensive plan update.
• The county provided new assessed value estimates on Friday before the meeting: new construction came in at 1.78 percent versus the roughly 2 percent staff had estimated, and total assessed value increased 1.71 percent.
• With the regional fire authority now stood up, the city is removing $3.4 million of fire department expenses and a corresponding $3.4 million of revenue from the general budget. Staff projected a property tax rate reduction of 84 to 85 cents, comprised of about 7 to 8 cents from the expiring 10-cent levy lid lift and about 70-something cents from a property tax levy reduction. Staff said the city was keeping its promise to give back $3.4 million.
• General fund revenue assumptions include sales and use tax growth of about 2 to 3 percent per year; two new voter-approved sales taxes, one for transportation and one for public safety, are each estimated at $390,000 per year; utility revenues follow the adopted rate plan at roughly 3 percent growth.
• For 2027, real property tax revenue shows a negative $5 million change, reflecting removal of the EMS levy and fire-related levy revenue. Fire expenses in the 2026 amended budget were about $5.2 million, with the EMS levy around $1.6 to $1.8 million.
• Preliminary 2027 general fund expenditures include a placeholder 5 percent increase for public works. General government services decrease because there are fewer transfers out of the general fund, with more capital project support now coming from grants.
• The 2027 general fund expenditure presentation includes a $100,000 fire impact-fee placeholder; the city will continue collecting fire impact fees and, per state auditor and BARS requirements, records the revenue and corresponding expense.
• The strategic fund is projected to start the year with $567,000, and the plan is to use the entire fund by the end of 2028. The fund originated from prior surplus and has been used for strategic initiatives.
• The 2028 general fund revenue estimate shows 2.35 percent growth over 2027. The general fund balance is projected to remain stable around $5.4 million to $5.3 million.
• Utility revenue projections follow the FCS rate study for its final two years: water revenue growth of 3.8 percent, sewer growth of 2 percent, and stormwater growth of 3.8 percent. A new rate study will begin in 2028.
• Opioid settlement funds have been used for AEDs for police and fire vehicles; a planned NARCAN purchase was instead covered by a grant. Funds are still accumulating because some settlements are paid over ten years. Staff suggested a working group could consider eligible uses.
• Budget calendar: the city manager's proposed budget and third-quarter 2026 update are scheduled for October 26; a public hearing and possible first budget adoption is set for November 9; all levies must be approved by November 30; the budget must be adopted by the end of the year.

Finance: 2027-2028 Budget - Council, City Manager's Office, Human Resources, Finance/IT, and Others

• City Manager's office: the 2027 proposed budget is 6.21 percent above the amended 2026 budget, and 2028 is projected 14.66 percent lower. The current city manager has submitted retirement effective April 15, 2027 (tax day), and the 2027 budget includes about a month and a half of overlap with a new city manager plus payout costs. Salary and benefits are budgeted at $449,000 in 2027 and $381,000 in 2028; professional services are $50,000 in 2027 and $35,000 in 2028; $40,000 for brand strategy implementation and $10,000 in supplies are funded through the SPIF fund; $25,000 is available for council and administrative incentives.
• Council budget: salaries and wages remain subject to salary commission approval. Intergovernmental services drop in 2027 and then increase from $25,000 to $35,000 in 2028 because of county election and voter registration fees in a general election year. The budget includes $8,000 for travel and training and roughly $1,000 for advertising and $1,200 for insurance related to public hearing notices.
• Finance and information technology: the 2027 budget is about 2 percent above 2026. The department has nine FTEs, with two in IT and seven in finance. IT services include citywide software and capital leases of about $210,000, covering systems such as Tyler ERP, Civic Plus, the agenda system, Office 365, and the website, plus citywide phones, internet, and networking. The finance budget includes $10,000 for an accounting intern, with a WFOA intern scholarship expected to offset half the cost.
• Computer and equipment fund: the city transfers about $50,000 per year from the general fund into this fund for citywide computer equipment and software, maintaining the level established in 2022.
• Human resources: the 2027 budget is a modest increase over 2026, and 2028 is projected at 3.1 percent above 2027. It includes a $30,000 tuition reimbursement program, $5,600 for wellness, and about $2,000 per year for professional services such as training, background checks, and legal expenses. Human resources is a department of one.
• Legal: the citywide legal budget is set at $20,000 per year for council meeting attendance, executive sessions, and resolution review. Legal costs for individual departments are charged directly to those departments.
• Arts fund: the city contributes $10,000 per year, with a $28,000 reappropriation in 2027 and a $10,000 reappropriation in 2028. About $18,000 is expected to roll over after payments for the mural and other expenditures; the fund is also earning interest.

Reports & Communications

• The mayor reported attending a WPPA environmental conference in Seattle the prior week. The mayor discussed industrial symbiosis, including a delegation in Denmark, a potential future trip, and tying future 41st Street infrastructure to hot water from the sewer plant area.
• A report noted that this year's downtown Trick or Treat falls on Halloween, a Saturday, and city staff cannot participate because it would require overtime pay. Several council members volunteered to staff the city's candy table, continuing the past practice of setting up outside City Hall.
• The mayor noted that C-TRAN's annual survey for 2027 priorities is out and proposed scheduling a council conversation so the response reflects the full council's perspective rather than only the mayor's.

Key Outcomes

• No formal motions or votes were taken; the meeting was a workshop.
• The development code update will proceed to planning commission and council hearings in November, with a single consolidated council action scheduled for December 7.
• The 2027-2028 budget process will continue with department presentations in October. The city manager's proposed budget is due October 26, the public hearing and possible adoption date is November 9, levy approvals must occur by November 30, and final budget adoption is required by the end of the year.
• Updated transportation impact fee figures will be brought back to council because six-year TIP construction cost and funding assumptions changed.
• Council members volunteered to represent the city at downtown Trick or Treat, and a council conversation on C-TRAN priorities will be scheduled.
• The next scheduled workshop and council meeting is Monday, October 12, 2026, at 5:00 p.m. and 7:00 p.m., respectively.