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Ferndale City Council Meeting
Held Monday, February 7, 2011
City Hall Annex – Council Chambers
6:00 p.m.

PRESENT BY ROLL CALL:
Councilmember Steve Malpezzi

Councilmember Mel Hansen
Councilmember Connie Faria
Councilmember Paul Ingram
Councilmember Jon Mutchler
Councilmember Lloyd Zimmerman
Councilmember Brent Goodrich
STAFF:

City Administrator Greg Young
City Clerk Sam Taylor
Finance Director Mark Peterson
Public Works Director Janice Marlega
Comm. Development Director Jori Burnett
Chief of Police Mike Knapp
Public Works Supervisor Bo Westford

Mayor Gary Jensen presiding.
6:00 p.m. CALL TO ORDER: / FLAG SALUTE:/ ROLL CALL:

6:01 p.m. PUBLIC COMMENT
Patrick Alesse, 4825 Alderson Road, Birch Bay:
Alesse came to speak about the Douglas Hong
property, which the city considered purchasing but an appraisal found the cost would be far lower than
Mr. Hong wanted for it. Alesse said he was speaking on an issue with a developer wanting to drain a lake
and build on it. The same map shows a piece of property in Ferndale. You don’t see a lake on in it, he
said. The guy can’t sell the property. Ferndale has allowed development around the property.
Development drains property near it, he said, and people have to be responsible for it. Nobody wants to
be responsible for it. Alesse said it’s not fair for the City of Ferndale to screw up on the property, allowing
development around the area to direct stormwater to Mr. Hong’s property and then offering him a very low
amount of money for it.
Councilman Zimmerman asked if Birch Bay had a stormwater drainage plan. Alesse said there is finally
one there. But he’s been saying for years that the Romans had a feeding area below them and they built
Rome on seven hills and found out that water was draining onto everything. Once they learned that, they
took care of drainage first. Alesse said we like to think we’re more civilized than the Romans, but
drainage is the last thing we take care of.
Johnny Grames, City of Bellingham: Said he wanted to come speak about the new City Clerk, saying
that Clerk Sam Taylor had “trashed” him in the newspaper when he was a reporter. He said he is active in
planning for the new jail. He said it’s really encouraging, for people like himself, that many people are
getting involved in the jail issue. He said he was pleased with the public participation on the jail, finally,
after seven years in which he felt like there wasn’t much public information about the new jail provided by
the Whatcom County Law & Justice Council. He said the city should be rightfully proud of Jake Locker
being from the area, since he would be part of the NFL draft.
George Hong, 2396 Douglas Road: He said recently he received a letter about Mountain View
Meadows drainage issues, but he said nothing has been done to prevent water from draining onto his
property.
1 Ferndale City Council meeting Monday, February 7, 2011
CONSENT AGENDA:
Approval of Minutes of Council meeting of January 18, 2011 Approval of Claims Run of February 7,2010 – Manual Checks #71750 -#71827, #71877 -#71887, #6909303; amount:$611,267.28 $; Regular Checks #71828 - #71876 amount: $96751.92; Total Claims Run:
$708,019.20

Approval of Payroll of Jan. 15, 2011 – Auto Deposit amount $15,813.43; Guild Dues: $0; Federal Tax Auto Deposit Amount: $15,464.07; Checks #52170 amount: $17,165; Total Payroll: $48,442.50 (Retirement &
Settlement Payroll)

Approval of Payroll of Jan. 20, 2011 – Auto Deposit amount $117,532.63; Dept. of Retirement Deposit: $25,269.04; Guild Dues & Federal Tax Auto Deposit Amount: 40,944.71; Checks #52171 - #52185 amount:
$47,514.22; Total Payroll: $231,260.60 (Regular Payroll)

Approval of Payroll of Jan. 21, 2011 – Auto Deposit amount $9,064.63; Guild Dues & Federal Tax Auto Deposit Amount: $4,398.21; Checks #00 - #00 amount: $0; Total Payroll: $13,462.84 (Sick Leave &
Vacation Cash Payroll)

Approval of Payroll of Feb. 1, 2011 – Auto Deposit amount $0; Guild Dues & Federal Tax Auto Deposit Amount: $1,108.70; Checks #52186 - #52205 amount: $6,695.98; Total Payroll: $7,804.68 (Uniform
Allowances)

Approval of Payroll of Feb. 4, 2011 – Auto Deposit amount $122,349.89; Dept. of Retirement Deposit: $24,494.65; Guild Dues & Federal Tax Auto Deposit Amount: $41,451.80; Checks #52206 - #52218 amount:
$46,593.03; Total Payroll: $234,889.37 (Regular Payroll)

2011 Monthly Budget Amendment
Councilmember Ingram moved, Goodrich seconded approval of consent agenda.
Carried unanimously.

C.
First Quarter Boards/Commissions Oral Reports

FERNDALE ARTS COMMISSION – Barbara Ingram, 2448 Peasant Way, Ferndale:
The Arts
Commission has been kind of floating idly, she said. They are trying to come up with new ideas, like a
quilt show or painting items for auction. They are trying to determine more events and programs that
could fit into their duties.
The Arts Commission just received information from City Clerk Sam Taylor about a Ferndale High School
student teacher who would like to work on a project with students that the Arts Commission could get
involved in.
Council member Malpezzi asked that boards and commissions submit written reports in the future. Mayor
Jensen agreed that was likely more effective since only one member of any commission showed up for
the meeting.
C2: 2011 Fire District Cost
City Administrator Greg Young said the city incurred a 23 percent assessment increase for what the city
owes to Whatcom County Fire District No. 7. Young said the city is not in the district, but does receive
service through an interlocal agreement.
For some reason, he said, property valuation assessments with the refineries dropped significantly, while
Ferndale’s values didn’t drop as much. The Fire District, thusly, was limited with what they could assess
per $1,000 in assessed value to the district property owners. But the city’s interlocal agreement is not
restricted in such a way, Young said.
2 Ferndale City Council meeting Monday, February 7, 2011
The city administrator shared that there is one idea to bring the city into the fire district, which would require a public vote. The levy rate increase would have been blunted if the city was in the district, Young explained, because it would have been spread out across more customers. Another advantage for the citizens of Ferndale is that citizens could run for and vote for the Fire District Board of Commissioners, which would provide city residents direct representation within the district. Right now, the city is saddled with a rather large increase in the fire contract, Young said. The city knew it would be more than what might be projected, but they couldn’t know until recently what it would be. The costs will come out of the general fund. Ferndale started the year with more cash on hand than was projected, however, and so for now that has blunted the impact of the assessment costs. Councilmember Faria asked if it was possible to get a second opinion on the assessment. Young explained that the county assessor had been contacted by Finance Director Mark Peterson. Peterson shared that he doesn’t believe it is possible to challenge it. Peterson shared that the refineries are aggressive in working to keep their assessed values lower by challenging and they are effective at doing it. The city’s assessed value only went down about 4 percent versus about 18 percent in decreases for the refinery properties. The city has seen very large increases in the past, though they were becoming lower recently, Peterson said. He projected a 5 percent increase, and instead it came in at 23 percent for the fire assessment. Councilmember Zimmerman asked when the information was offered. He wanted committee to discuss it more. It was explained that the item was informational. Councilmember Goodrich wondered what the disadvantages might be of joining the district. Administrator Young said that one issue could be in the future if the city ever grew enough to internalize its own fire department. That is a large endeavor, he said. It could be difficult for the city to remove itself from the district in the future. If the city became part of the fire district, the district would directly assess a levy on residents. Ferndale would then lower its levy rate by a comparable amount in order to equalize the costs to residents. The administrator shared with the council an explanation about the levy rates and the impacts to the city’s budget. He said he didn’t believe there were many disadvantages to the city or residents. He believed it would be more beneficial for taxpayers. Councilmember Faria wanted to know if other cities were part of a fire district. She also wanted to know the impact to taxpayers. Young told Faria that it’s a mix of other cities within and out of districts. He believed some of the smaller cities were in fire districts. He said it could be for citizens joining the district; it could help smooth out the rate. District No. 7 Chief Russell shared that it takes about $1 million to run a 24-7 fire department. Over the next three, four or five years, there is an estimated $800 million in construction planned in Cherry Point. The development there has a substantial impact on the budget of the fire district, Young explained. 3 Ferndale City Council meeting Monday, February 7, 2011
Councilmember Faria asked about the next steps and if there should be a community meeting in the future. Young said he believed it would go to committee and then he would invite the fire chief to the committee meeting to discuss the issue further. The city should also spend time researching the issue about how other cities have dealt with the issue of considering joining the district. The administrator shared that the fire district commissioners considered in fall 2010 coming to the city seeking to annex the municipality into the fire district. Councilmember Hansen wondered how the calculation is done to figure out the property tax rate for the fire district. Administrator Young explained the process for determining levy rates. Councilmember Hansen was curious about the cash on hand for the general fund. Finance Director Peterson said the fund balance target is 10 percent for reserves. Hansen said he believed that the fire district keeps a 100 percent reserve on hand. He believes that the district is not taking advantage of using its fund balance, instead placing the impact on users. The councilmember offered that he would like in future negotiations that the district taps reserves. Councilmember Mutchler wanted to know how this new assessment came about, if it was only from the assessor. Peterson said he believed it was a combination of the district and county. Mutchler then wondered what the city’s involvement is in working on collective bargaining and other issues with the district. Mayor Jensen shared that the city requested in a previous year to partake in discussing the district’s budget. Mutchler said becoming part of a district could give residents more of a voice. He also wanted to know the costs of a fire department. Young said normally a fire department is comparable to a police department in costs. He said right now the city is getting very close to paying the fire district the same as the city spends annually for the police department ($1.2 million versus $1.1 million). But there are issues of start-up costs for capital improvements, such as buying fire trucks and more. Mutchler wanted to know the per-person costs of a department. Councilmember Ingram said that he lived in an area that converted from a fire district to a city department. He explained that costs were shocking to everyone, especially the council, saying it was astronomical. The city would have to purchase the fire houses, Ingram offered, as well as purchasing the equipment. His opinion is it is worth hanging onto the fire district for as long as the city can, he said. 4 Ferndale City Council meeting Monday, February 7, 2011
He estimated the costs at $70 million to $85 million to start up a department.
Councilmember Zimmerman argued that it was a very large tug of war previously over a property issue
with the district.
He thought it would be a good topic for the community to gather and discuss.
The topic will go to committee, Mayor Jensen said.
D.
RESOLUTION: City Well Water Project USDA Loan

Finance Director Peterson gave the background of the project. The city is seeking below-market finance
for rural development loans that are very low interest. The resolution is required for the financing
package.
Councilmember Goodrich moved to approve the resolution. Councilmember Ingram seconded.
Motion carried unanimously.
E.

IMPACT FEE REBATE PROPOSAL: Council Discussion & Public Comment (No Council
Decision Scheduled)

This proposal was switched to be discussed prior to an ordinance for expanding a discounted water bill
program.
Councilmember Goodrich, who made the proposal about the fees. He said the city needed to deal with
the topic one way or another.
He received input from the public, including developers and builders, he said. Goodrich said he asked the
Economic Development Commission’s thoughts on the topic, too.
The EDC believe it should only be for non-residential projects. The commission’s thinking was that the
city needs non-residential projects, like commercial and industrial development. Those are places that
would hire workers, he said, and provide a long-term impact to the city. Retail development would also
benefit the community due to sales tax dollars that would come into city coffers.
He said he is not completely bound to his current proposal and is open to changes, but he would like to
hear more from the community.
PUBLIC COMMENT WAS OPENED UP.
David Verret, 2620 N. Harbor Loop, #6, Bellingham: Verret said he was a building designer that lived in
the City of Bellingham. He congratulated the council on discussing the topic and said cities need to
reduce impact fees.
He said the times call for lowering fees. Unit costs are getting higher and higher, he said, and they’re
getting out of control with layer upon layer of development impact fees. He shared that this is not a
developer’s incentive. He thinks it’s a single-unit incentive.
The rebate would not be much of an incentive as proposed, when developers already start in the negative
on projects.
Verret said he could not think of a worse decision than not allowing this rebate on residential units.
The city is sitting on the potential for 500 to 1,000 residential units, Verret offered. He said he would be
available to discuss this further with council members who were interested, but said he was appropriate
not to vote on the topic tonight. He explained he would be sending a letter.
5 Ferndale City Council meeting Monday, February 7, 2011

Verret said he was also with the Building Industry Association of Whatcom County and they have also
sent in documents. The BIAWC is in full support of the reduction, he said, for the small to large single-
family residence.
David Braithwaite, 5998 S. Bakerview Park Dr, Ferndale: He started by saying he has been a self-
employed contractor for about 25 years.
He said he had never developed before but went to the Community Development Department to get an
idea of the impact fees and costs associated with building. He said the costs provided to him were not
representative of the reality of the costs associated with development.
Braithwaite explained as a developer that he would not be attending the meeting if the market was where
it was at when the impact fees were set. But reality is that the market has been reduced substantially.
Singly family property costs far less now, and the feasibility of projects in Ferndale is getting smaller and
smaller.
If someone wants to do a project, it must make financial sense, Braithwaite explained.
Braithwaite said fees have increased too much, and that the City of Ferndale’s increase of 23 percent
from the fire district doesn’t equate to what he’s experienced with impact fee increases.
He said the smallest increase in fees was a 38 percent increase, and the largest --- in parks impact fees --
- was more than 300 percent.
Braithwaite argued that he wasn’t advocating a fee reduction on the development side. But he said it
would help people sitting on lots to spur development by reducing impact fees.
He believes that single-family development should qualify for the rebate.
He noted that the city is asking builders and developers to deal with increases in fees at the time their
property net worth has been reduced substantially.
Braithwaite wanted the city to realize that developers are undergoing hardship right now.
He knows the intention of the council is to do what it can, what it can afford to do to help stimulate the
development industry.
Bo Westford, City of Ferndale Public Works Supervisor: Westford offered that for the 11 years he’s
been with the city, Ferndale has struggled to rebuild its infrastructure, which is failing miserably.
He said the city can’t afford to keep up and maintain new annexed area or current infrastructure. He also
said the administration and council have done a good job with the budget, but to give up money now
seems backwards at this point.
There are still residents using the city’s infrastructure, he said, and nothing is being reduced. There are
other levels of government that mandate specific items the city must deal with, Westford said, and it’s
difficult now to deal with those items.
Westford offered that he understood the arguments of builders, who he considers friends, but that the
proposal doesn’t make any sense for the city’s infrastructure.
Councilmember Ingram wanted to know about what the fees would do to the city’s snow removal budget.
Westford said the current snow removal budget is about $5,000.
6 Ferndale City Council meeting Monday, February 7, 2011
Councilmember Goodrich said the proposal has nothing to do with general fund budget items, and that impact fees go to capital improvements. Finance Director Mark Peterson explained the city’s current parks mitigation funding, which currently is $0 due to budget constraints. The city has an obligation of $98,000 per year that must be paid for low-interest loans that have been taken out to construct the Centennial Riverwalk and Griffintown Park. City Administrator Young explained where impact fees are used. He shared with the council the topic of water rates and that philosophically there are two components to water and sewer issues. One is bimonthly utility bill rates and then connection fees that go, ideally, to upgrading the city’s infrastructure through capital improvement projects. The city has blended those revenues now, which allows water rates to be lower. If Ferndale did have a situation where rates were a bit higher and the funds were a bit more separated, it would provide flexibility. But because of budget constraints, the city has had to assess realistic water rates for customers and what realistic and fair connection fees for developers should be. Projects have generally been done during street upgrades, which are convenient to do during transportation infrastructure upgrades, but they’re not necessarily the most essential projects the city needs to do. If impact and connection fees were reduced, Young offered that the city would need to then assess the types of cuts to capital projects would be necessary. He explained that in March the sewer comprehensive plan would be up for discussion where the council will be working on what types of essential capital improvement projects need to happen to help replace aging infrastructure while the city continues to grow. The blended rate and connection fee revenues have allowed the city to keep water rates low. But separating those two might be that there is more pressure to raise water-sewer rates for existing customers. Young likened it to a water balloon whereby if it is squeezed the pressure will be transferred to somewhere else that would need to be dealt with. Councilmember Ingram added to his previous comments in which he argued that there are bills the city must pay and by reducing fees, the city would need to figure out other ways to pay debt service. That would mean other areas of the city’s budget would have to be examined and it could impact other services. Councilmember Goodrich argued that if there was no building the rest of the year the city would be in a “world of hurt.” He said the city is already gambling on the number of building permits that will be used in the city. Community Development Director Jori Burnett said it’s very difficult to project out far, but that in January 9 single family residential units were permitted. That’s more than the last four years of the same month combined, Burnett pointed out. The city isn’t dropping units, unlike every other city. 7 Ferndale City Council meeting Monday, February 7, 2011
The scale of development for residential has maintained or increased. Burnett said he wasn’t sure how many developers are sitting on the sidelines, and he figured there were some, but Ferndale really isn’t seeing the types of impacts other places are. Mayor Jensen wondered if there was a per unit projection per month. Finance Director Peterson said it is an average monthly projection and it appears the city is ahead now. Councilmember Mutchler argued that the costs of building are getting higher and higher, that engineering costs are getting stricter, employee costs are increasing and the city needed to be aware of the ongoing constraints placed on builders. The councilman also pointed out that empty lots do not provide the same amount of property tax dollars as developed lots. He said he understood the difficulties from both sides, including the city. Mutchler noted that if fees were cut in half, the number of permits would need to double in order to make the same amount of revenue. In 1994, Mutchler paid $4,700 for his first home, in 2004, the fees were $11,000 for another home. He also shared other increases he saw building one home to another. But his thinking is that he believes a 25 percent rebate for park impact fees and water and sewer and connection fees could be beneficial and wouldn’t impact the city as much. That would mean the city would only need to see a 33 percent increase in permits to make up the costs He believes the city must absolutely do something for the development industry. And he wants the city to continue to maintain its reputation for fastest turnaround time on permits. Councilmember Malpezzi said he was pleased with the discussion and looked forward to it continuing in the future. He noted that fees are projected to increase by 70 percent in 2012 and he saw no way to make up that revenue if fees were reduced. That would mean the city would be $12,000 in the red for the budget, and that would be a big gamble. Councilmember Faria offered that if fees were cut in half, and permits were doubled, the city would then see doubled impacts with even less fee revenue that can help blunt the impact of that growth to current residents. She also wanted to know if there was any other kind of incentive that may help builders that doesn’t affect funds the city needs in order to pay debt service. Councilmember Hansen agreed with Faria, and elaborated that if someone builds a single-family home, the connection fees allow that home to be hooked up to a multi-million-dollar water and wastewater treatment facility. Doubling the permits for two houses, doubles the impacts to the city’s water and wastewater systems. The point of the impact fees is that there is an impact, he noted. Administrator Young had two related points on any other incentives to encourage development. The city has done that by offering a 50 percent reduction if people locate near the water-sewer treatment plant. That program was theoretically to encourage development need downtown, too. There were no takers, until the zoning was expanded. 8 Ferndale City Council meeting Monday, February 7, 2011
His other point was that how developers make money is not so much how much it costs to build the
home, it’s what they can sell it for. It is a market-driven industry, he said. For the city to encourage
development in the city, it must be market-driven. Ferndale can’t drive development significantly, he said,
because they tried it with downtown and it hasn’t completely worked.
Mayor Jensen said, as a plumbing contractor, his income is lower than it’s ever been, his company is
smaller than it’s ever been in 15 years. Some of his employees draw unemployment some weeks due to
a lack of work.
Jensen said bankruptcies in the industry are higher than at any time he could think of.
He said that as a contractor things are tough, but as a mayor he understands the impacts are there.
Ferndale has the goal of being faster, better and more efficient and continues to excel, though there is
more work to be done.
David Turner, 5895 Foxtail Court, Ferndale: A contractor, said one of his pet peeves is mixing impact
fees and rate payer fees. The connection fees shouldn’t subsidize water and sewer rates, he argued.
Turner said the only way to turn around the economy and lack of development is help for builders so the
costs of the construction is low enough to be viable for the market.
Turner said he’d been building for 22 years.
Councilmember Mutchler wanted to know if there was a reasonable or unreasonable costs associated
with doing business over the years.
Turner said it’s just like buying a vehicle in the 60s, which had no amenities, but now cars have far more
to them and they cost more. Housing is the same way, he said. Regulations and restrictions are adding to
the price of development, and builders have to put up with it, he said. But the council can make a stand,
he argued.
Ron York, 1292 W. Axton Rd, Ferndale: York noted that this is a very difficult topic and there are many
opposing views. He said there is a lot of pressure on the issue and it’s up to the council to divine the best
path. He doesn’t envy the council.
York is in favor of Councilman Goodrich’s proposal, but he strongly suggested the proposal should
include residential impact fee rebates, too.
He suggested that part of that is due to the impending energy code updates that are coming up, and
builders got permits to avoid increased costs. The same thing happened with impact fees increasing in
Ferndale before 2011.
York argued there would be a significant rush to city half with a 50 percent rebate.
He said he didn’t have to build in Ferndale and he had other options, but he likes the city.
York is in favor of the proposal to help stimulate the economy of Ferndale and Whatcom County and to
help meet the objectives of the city’s comprehensive plan under the heading over affordable housing.
The severe economic downturn the country is faced with has meant that “business as usual” is not a good
option. The city must mix it up and do something to help.
York acknowledged that there is a gamble involved in not knowing if this would be effective.
9 Ferndale City Council meeting Monday, February 7, 2011
The builder said he does major mathematical assessments before construction to see if it is economically
feasible to do a project.
York argued that the only thing that has increased over the last few years is impact fees, while the other
costs of construction have been reduced due to the recession. Everything from foundation to roofing work
bids have dropped, and they have to, otherwise it’s not feasible or cost-effective to do the project.
Prices are coming down to develop while fees are increasing, and York believes that’s a problem.
The city’s comprehensive plan calls for affordable housing and Ferndale officials should make hard
decisions to be a part of that.
York said he paid $110,000 in fees for 11 units in Vista Meadows.
In the summer 2011 he will be assessing the feasibility of another project of fourplexes.
Issues that will be looked at will be interest rates, impact fees and labor and material costs. He said he is
less concerned about filling the dwellings, but he is scared about the costs of getting the product to the
market place.
A temporary rollback in fees would not be unusual. Blaine has done it, Sumas has done it. It’s happening
in Seattle, King County and Bellevue.
His projects generate jobs and money for Ferndale residents, he said.
York said this rebate is not a subsidy for developers. He doesn’t just guess at these issues. But he would
pass on the impact fees via rents for the units he constructs.
Councilmember Zimmerman wanted to know if impact fees went away, what would affect the $925 per
month.
York said he’d cut off $25 if $10,000 in impact fees for a unit went away.
Councilmember Faria said she didn’t believe higher-end units would qualify as affordable housing.
By reducing impact fees, she wondered if they were reduced in that way if it would be enough to reduce
rents into affordable housing.
Councilmember Mutchler offered that both retail development and single-family development needed to
happen in order to keep each other afloat.
Mutchler also said he believed York was saying that providing the rebate in Ferndale might encourage
developers looking at other places in Whatcom County to come to the city.
Councilmember Hansen argued that reducing rents because of the impact fee rebate might not make
much of a difference if the city has to increase water and sewer rates to make up the difference.
Councilmember Goodrich clarified that his proposal is for across-the-board including residential. He was
sharing the EDC’s thoughts on just for non-residential. He personally believes residential should be
included.
Patrick Alesse, 4825 Alderson Road: Alesse said the discussion is good for the education of the city
and for community conversation.
Cities always have impacts. In Bellingham they tax themselves even for parks to maintain their quality of
life.
10 Ferndale City Council meeting Monday, February 7, 2011

Alesse argued that there is greed for growth where municipalities feel like they have to grow in order to
maintain the tax structure.
Chad Schmidt, 2629 Elizabeth Street, Bellingham: Schmidt resides in Bellingham but does the majority
of his building work in Ferndale.
He said they did a project in Blaine due to their reduction in impact fees.
Schmidt argued that Real Estate Excise Taxes would be increased by more homes being sold, sales
taxes would be increased with more residents shopping in town. He said he understood infrastructure
needed to be maintained.
Schmidt argued that a developer already pays a lot for infrastructure within the development. Schmidt
wondered if the city shouldn’t increase taxes instead to pay for maintenance of infrastructure.
He noted that there was an unfair market advantage for the developers who got permits in December
2010 prior to fees being increased.
Schmidt said the proposal is for a very short period of time, and it would mean stimulation in the growth of
the city.
Councilmember Zimmerman wondered if there was an “economy of scale” by reducing fees that would
encourage development and builders would buy in bulk, say, lumber for four to five units versus one now
that it was more affordable.
Mayor Jensen asked Schmidt and others if the program would work for one year, rather than two years.
Schmidt said there will need to be an assessment of how the lot inventory will be reduced. He said he
believes the program in and of itself will encourage spurring some development, and might even
encourage higher-quality amenities within the residence.
Goodrich said the point of the requirement for a rebate upon issuance of a final occupancy permit was to
spur development now, and not later.
Community Development Dir. Burnett explained that one thing staff would want to assess if this were
adopted would be to ensure that developers aren’t contacting the department in a rush to get final
occupancy inspections. He doesn’t want the city to have to be stuck in the middle of trying to be helpful to
a contractor versus doing what is best for the whole community by assessing the property based on
current regulations.
Councilmember Ingram asked about having the money to pay for water pump booster stations. He noted
that it’s a two-edge sword. Impact fees are used to improve services and infrastructure in the city that
allows developers to build in some instances.
Councilmember Faria wondered if there is a way to know how many homes are on the market but not
sold. She thought there might not be a point to offer a rebate if homes couldn’t be sold.
Chet Kenoyer, 515 W. Bakerview, with Windermere Real Estate: He said he didn’t have stats on hand
but would provide it the next day.
The city struggles to make ends meet, he said, and the council and administration do a good job in those
decisions. At the same time, these incentives can be a huge boom for real estate and buyers.
11 Ferndale City Council meeting Monday, February 7, 2011
He represents five developers in a subdivision in Ferndale that has 78 lots. He said they started in the
mid-$130,000s. They dropped them to $99,000 and nothing happened. The fully developed lots are now
$59,900.
Those lots have been at that number for about eight months, he said.
The question is if this will ultimately spur people to build. Kenoyer said he does believe it would be
impactful. He suggested the city investigate how a fee reduction worked in the City of Blaine.
Councilmember Mutchler asked about current building in Skyview. Kenoyer said what has spurred growth
is the cost of the lots in the subdivision.
Councilmember Faria wanted to know more about the City of Blaine’s proposal.
Bill Kramer, 1442 Sunset Ave., Ferndale: He is a developer who has worked in the Skyview
development.
He said the industry is tough and the developer could use any help they can get.
Things keep increasing, Kramer explained. He has to build because it’s been difficult to simply sell lots.
Anything the city can do to help the industry survive would be helpful. He is glad that he has rental units,
because that has been his wages in the last few years, as opposed to development, which has been
difficult recently.
He gave kudos to the Community Development Department and the staff for the work they do to help.
Councilmember Hansen rebutted comments about adding population and that would spur retail
development.
He said the city better work on the 82 percent of the residents that don’t shop in Ferndale. That revenue
goes somewhere else other than the city.
Adding a few hundred homes means that those people will likely still shop in Bellingham. What needs to
be stimulated is the current retail growth of the city.
The city must figure out how to get residents to shop locally as opposed to simply building new residential
units.
About five years ago, he said, the sanitary sewer system literally blew the lid off in front of City Hall.
Building was shut down in the area because the infrastructure as overtaxed.
The southwest sewer interceptor was paid for using fees, including a surcharge created as part of the
connection fees.
Without impact fees, the city wouldn’t have been able to build that sewer system, Hansen explained.
He believes giving breaks to stimulate growth is a good thing, but he hasn’t heard any answers about how
the current bills will be paid.
Administrator Young pointed out that the Whatcom County Council will be considering creating a grant
program for Economic Development Investment funds to be used for impact and connection fees for
affordable housing units.
That scenario is a win-win for developers who save the costs of the fees and for the community where the
fees will still be received from the EDI funds.
12 Ferndale City Council meeting Monday, February 7, 2011

Councilmember Goodrich moved to send the proposal back to Finance & Administration
Committee for further discussion. Councilmember Ingram seconded.
Councilmember Mutchler thanked everyone for the discussion and said that the issue didn’t have to be a
zero-sum game.

Motion carried unanimously.

F.
ORDINANCE: Expanding Low Income Water/Sewer Discount Program

Mayor Jensen asked that the council hold off on the issue until he impact fee issue is addressed.
Councilmember Ingram moved to table the item until the impact fee issue is addressed.
Councilmember Faria seconded. Motion carried unanimously.
Councilmember Faria wanted to know if the staff would look at Blaine’s impact fee reduction to see how it
has worked.
Councilmember Mutchler said he spoke with Blaine Mayor Bonnie Onyon about an across-the-board zero
impact fee proposal that has gone on for two years of a five-year period.

G. MAYOR

REPORTS/COMMENTS

Wednesday 7:30 a.m. to 9 a.m. at Babe’s Place can speak with Port of Bellingham Commissioner Jim
Jorgensen.
Tuesday, February 15, at 5 p.m. regarding the Nooksack Loop Trail, he invited council to attend.
The mayor will be out of town February 18 and 19.
Wednesday, Feb. 23, from 5:30 p.m. to 6:30p .m. for a public tour of Pioneer Pavilion.

H. COUNCIL

REPORTS/COMMENTS

Councilmember Goodrich reported from the Economic Development Commission regarding the new
deepwater Pacific Gateway terminal at Cherry Point. SS Marine presented the project. It’s a three-ship
bulk terminal pier that would be constructed. They are starting the Environmental Impact Statement
process now. Shipments would come in via train.
Goodrich said the council may want to consider a resolution to support the project. They’re already
getting some comments from other entities. As it will be near Ferndale, SS Marine would like that support.
They would be willing to come in front of council to give a presentation.
The administration will invite SS Marine for a 15 to 20 minute presentation on the topic.
Councilmember Mutchler reminded the council about Project Homeless Connect on Thursday, March 3.
He invited other officials to participate, as he has been active, as has Mayor Jensen.
He said he really appreciates new City Clerk Sam Taylor, and thanked him for the work.
Councilmember Malpezzi said the light in the bathroom needs to be fixed, as it’s automatic, and it shuts
off while men are using the restroom.
13 Ferndale City Council meeting Monday, February 7, 2011
He added that minutes for the last meeting needed to have roll call.
Councilman Zimmerman noted an article in The Bellingham Herald about gang activity in the county.
Chief Michael Knapp noted that one officer who was involved with a gang taskforce is no longer
participating, so the city isn’t as involved, however there is one detective who is still involved in
communicating on those issues.
Knapp said the issue is one of some grave concern, because gangs are moving into the area. Resources
do need to be dedicated to keeping abreast of those issues.
The chief also spoke about Officer Rich Turner being injured in a single-car accident in which his pickup
truck left the roadway. He is in serious condition in the Intensive Care Unit. There is speculation about the
conditions that existed at the time. Knapp said there is nothing official that has been found out, but that
the primary concern of the city now is the condition of Officer Turner. He said that will have an impact
operationally on the city. Ferndale has lost one officer to retirement and now lost another officer for a
substantial period of time.
Knapp explained that the needs of the department in 2011 were projected to be 20 officers, and now the
impact is greater.
In order to maintain the shifts, there will need to be more overtime hours for officers, but the department
has worked to keep costs down earlier.
Councilmember Hansen said Whatcom Transportation Authority Board members will discuss Thursday,
February 10, Bellingham’s Transportation Benefit District to help pay for Sunday bus service in the city.
One of the issues on the table is that as WTA recovers with sales tax revenues, and service is added
back, should it be added back in the same order it has been removed. Whatcom County gets 20 percent
of the service but pays 35 percent of the bill. What used to be a “very happy board of directors” has
become Bellingham versus Whatcom County, Hansen noted.
Councilmember Ingram asked that Council members Hansen and Mutchler cover his committees at the
next meeting.
Councilmember Malpezzi asked that Councilmember Mutchler take over his Finance & Administration
Committee assignment.
Councilmember Hansen moved, and Councilmember Ingram, seconded Mutchler’s confirmation to
F&A. Motion carried unanimously.


I.

DEPARTMENT REPORTS - Election Cost Change Informational
Community Development Dir. Burnett said on February 17 from 6 to 9 p.m. there will be a community workshop on the Planned Action EIS process. A mailing has been sent out, a public notice has been filed and a website was created on the topic. On Wednesday, Feb. 9, a Determination of Significance will be released on that topic. What that means is that if projected development does come, the city has triggered a planning process on that topic. This week is also the last week to finish briefings for pending Urban Growth Area defense of the restoration of the UGA put in at the Growth Management Hearings Board. The deadline is February 11 for those to be submitted, Burnett said. Whatcom County has been working with the City of Ferndale on the issue. Council’s action was the right thing to do and is backed by evidence on hand, Burnett said. 14 Ferndale City Council meeting Monday, February 7, 2011

Councilmember Mutchler asked on the UGA defense if it was Futurewise as the plaintiffs.
Burnett explained the main contention is that Ferndale’s UGA is too large to meet the residential needs of
the city.
City Administrator Greg Young mentioned at 11 a.m. Tuesday, Feb. 8, the county will be dealing with the
EDI funding application.
On Thursday, Feb. 10, at City Hall at 8 a.m., Ferndale will have a representative from the Social Security
Administration to discuss issues over benefits.
City Clerk Sam Taylor gave a very basic overview about how election costs will be assessed by Whatcom
County Auditor’s Office officials.
Public Works Director Janice Marlega said a work session on March 7 will happen on the Sewer
Comprehensive Plan.
J.
COMMITTEE MINUTES – INFORMATIONAL

ADJOURNMENT
The meeting was adjourned at 8:57 p.m.


15 Ferndale City Council meeting Monday, February 7, 2011
Public Works & Utilities Committee Meeting
Held Wednesday, February 2, 2011
City Hall Conference Room
7:30 a.m.
COMMITTEE:
Councilmember Mel Hansen – Chair
Councilmember Brent Goodrich
Councilman Lloyd Zimmerman

ADMINISTRATION: Mayor Gary Jensen

City Administrator Greg Young
Public Wks Director Janice Marlega
Project Manager Katy Radder
City Clerk Sam Taylor
Senior Foreman Bo Westford
Surface/Stormwater Manager Wendy
LaRocque


I-5/Main Street Interchange Signal Timing
Committee members were updated on signal timing at the interchange and were told that the eastbound
signal at Barrett Road was increased to allow for traffic to make a left turn on to Main Street.
The Washington State Deport of Transportation adjusted the signals, and they will be back to do more
timing changes for the westbound lanes. The state is scheduled to install fiber optic line along I-5, and
that will allow city signals to be synced with the state interchange lights. The City of Bellingham currently
manages Ferndale’s signals, and once the fiber is in, Bellingham staff will be able to work on Ferndale’s
signal timing from their offices rather than traveling here.
Ferndale staff are working with consultants to get new data for Main Street turning movements to assess
how signalization can be improved. The city had to wait for projects on 2nd Avenue and Main Street to be
finished, and for school to begin in order to get good data.
Main Street/Church Road Intersection - Discussion
Radder informed the council that grant funding from the Washington State Transportation Improvement
Board must be used for sidewalks in the area that also happen to impact properties outside city limits.
Generally, the city wouldn’t build sideswalks in those areas, but the grant funding is contingent on that
use.
No variance is likely to be achieved to not have to build those sidewalks, Radder said.
Staff will be working with those property owners on right-of-way acquisitions anyway, and so discussion
about the sidewalks and potential reconstruction of one property’s owners fence will be discussed directly
with the property owners.

Main Stret Project – Douglas to Church – Storm Drainage Options (Hong Site vs. Douglas Site)

BACKGROUND: City staff have been assessing a property for potential acquisition to be used as a
stormwater pond. Ferndale is waiting for one more appraisal on the entire Hong site, but an initial
valuation for a five acre parcel came in at $80,000.
City Administrator Greg Young said Mr. Hong has offered the property for $495,000, and so since the
numbers are so starkly different, it’s unreasonable to continue discussions on acquisition. City staff will
inform Mr. Hong that Ferndale is not interested in the property, but the city will wait for the second
appraisal figures just in case.
The city owns Douglas Road property that has already been assessed, but it is smaller. However, scaling
back the pond will allow for it to fit and it will adequately capture drainage from Main Street and Church
Road. At a later date, off-site stormwater drainage capacity could be added, Marlega added.
USDA Loan Resolution – City Well Water Project
BACKGROUND:
The city has been working to move toward its own well water system to get off the
Whatcom County Public Utility District No. 1 system as rates have consistently increased due to PUD
expansion plans.
Ferndale will seek a USDA low-interest loan for construction of the well water system and use previous
payments to the PUD to pay back that loan. Because of this, no rate increases will be necessary.
Marlega said the interest rate on the loan is very low, around 2.25 percent.
Councilmember Goodrich motioned, with a second from Councilmember Zimmerman, to
recommend approval of a resolution for a $5 million USDA loan. Carried unanimously.

Sewer Comprehensive Plan
Marlega gave a brief update to the council of initial figures for capital improvement projects identified for
the city’s Sewer Comprehensive Plan update. Most of the projects identified are necessities, though the
costs likely prevent the city from moving forward on all projects now.
More information will come back to the council in the future. A study session has been scheduled in
March for the council to discuss the plan, but more information will also be brought back to committee.
Committee adjourned at 9:03 a.m.

Planning & Land Use Committee Meeting
Held Wednesday, February 2, 2011
City Hall Conference Room
9:04 a.m.
COMMITTEE:
Councilmember Connie Faria – Chair
Councilmember Paul Ingram
Councilman Brent Goodrich

ADMINISTRATION: Mayor Gary Jensen

City Administrator Greg Young
Community Development Director Jori Burnett City Clerk Sam Taylor
Public Works Director Janice Marlega

Transportation Impact Fees - Discussion
BACKGROUND:
City transportation impact fees have not been updated since 1997, partly due to an out
of date Transportation Element of the Comprehensive Plan, and partly due to a lack of maintenance on
the part of the City.
At its most basic level, the impact fee discussion can be broken down into a simple mathematical
calculation: how should the anticipated $31 million in impact fee revenues (and related development
improvements) be distributed throughout the City?
Based on the principles discussed above, and the City Council’s previous discussions throughout the
transportation element update, the following guidelines will be applied to the transportation impact fee
ordinance:
1. The City will allow opportunities for development that constructs all or a portion of an identified project to receive all or partial credit for impact fees. 2. The City will establish a Citywide cost per trip, initially estimated at approximately $3,800, and subject to change depending upon Council action. 3. Development shall be responsible for approximately forty percent of the total capital project costs (approximately $31 million of the total $77 million capital costs). 4. The City will assume that growth within the unincorporated Urban Growth Area (once annexed) will contribute to its relative share of capital improvement costs. 5. The City will assume that each vehicular trip will have one trip “end” in the City and one trip “end” outside of the City.
DISCUSSION: Burnett sought some basic thoughts from council members on how they wanted to
proceed on the details of an update to the city’s transportation impact fees.
Impact fees must be used to help deal with the impacts of growth, and so they wouldn’t be able to be
used for any and all projects, especially if there is a current deficiency in the transportation system the city
would need to deal with before growth affected it more.
Staff believes it’s important to have a single, predictable impact fee schedule. It appears council members
in attendance agreed with that direction.
The city can exempt some construction projects from the fees if they are for a broad public purpose, like
the building of a school. Committee members did not agree with that exemption.
Burnett said staff will work with city consultants, Transpo Group, to assess what the impact fees might
look like without a freeway overpass at Thornton Street and will also look at the potential for creating fees
that increase based on inflation.
Staff recommended that fees be paid at the time a building permit is issues or at temporary occupancy
rather than at final occupancy. Burnett said some businesses could go out of business after some amount
of time before having paid impact fees.
Committee members said they were interested in providing two options in the proposal: Paying the fees
immediately up front or by the time temporary occupancy permits are issued.
Staff is also recommending a trip level that is 50-50 when accounting for vehicles that either travel
consistently inside city limits versus vehicles that leave the city for elsewhere. This type of assessment
will impact how the fees are calculated. Consultants will continue to work on this, Burnett explained, and
bring it back to council with more specifics.
Committee adjourned at 10:06 a.m.

Police State & Library Ad-Hoc Committee Meeting
Held Wednesday, February 2, 2011
City Hall Conference Room
10:05 a.m.
COMMITTEE:
Councilmember Paul Ingram – Chair
Councilmember Connie Faria
Councilman Mel Hansen

ADMINISTRATION: Mayor Gary Jensen

City Administrator Greg Young
City Clerk Sam Taylor

Library Project Update

The meeting began with an announcement by Councilmember Faria that her husband appears to be the
final candidate for a new job in Abu Dhabi. The family would be moving to that country some time in
summer 2011. Faria said more details will need to be shored up before she potentially tenders a
resignation. Nothing is final, she said.
Administrator Young then updated the committee on the library project, and said everything appears to be
on schedule for the library to move into Pioneer Pavilion on March 16.
Only minor tweaks are being made to the renovated pavilion in order to make everything work, he said.
The city will develop a revised interlocal with the Whatcom County Library System to spell out the city’s
ownership of the facility and the library’s ownership of its materials and management of its staff. The
agreement will be standard and basically mirror what is already in place for the current library building on
Main Street, Young added.
A tour for the council was scheduled for 5:30 to 6:30 p.m. February 23.
Councilmember Faria updated the council on a Pioneer Park & Pavilion neighborhood stakeholders
meeting initiated by the mayor to make sure everyone was on the same page before the library moved in.
She said she thought the meeting went very well and that everyone was very positive.
Committee adjourned at 10:33 a.m.

Finance & Administration Committee Meeting
Held Wednesday, February 2, 2011
City Hall Conference Room
10:36 a.m.
COMMITTEE:
Councilmember Connie Faria – Chair
Councilmember Paul Ingram
Councilman Steve Malpezzi

ALSO PRESENT: Councilmembers Brent Goodrich, Jon Mutchler
ADMINISTRATION: Mayor Gary Jensen

City Administrator Greg Young
City Clerk Sam Taylor
Community Dev. Dir. Jori Burnett
Public Works Dir. Janice Marlega

Impact Fee Rebate Proposal - Discussion

BACKGROUND: Councilmember Goodrich, with the back of Council members Zimmerman and Mutchler
have requested that the full council have a public discussion at the regular council meeting on an impact
fee rebate for developers.
The plan would provide a 50 percent rebate within a certain deadline upon receiving a final occupancy
permit for a project. Water and sewer connection fees and parks impact fees are the only impact fees
proposed for rebate eligibility.
Mayor Jensen said he took issue with the proposal because the city must deal with the impacts of new
growth and current revenues don’t do that. By reducing the amount of impact fees collected for the city
and trying to encourage more growth, current residents would have to pay for the costs of that growth
rather than the development helping to pay for itself.
Councilmember Goodrich said he acknowledged there were a lot of unknowns about the proposal as to
whether it would spur development or what the impacts to the city’s budget would be but that he thought it
was important to help encourage job growth.
Council member Faria said she was concerned about the proposal because there doesn’t appear to be a
need to reduce fees, as Ferndale is one of the most active areas in the county for development.
She said the fees are not overly burdensome and that they pay for practical, identified costs of impacts
associated with growth.
Council member Ingram said he believed that there simply isn’t enough financing out there for
construction right now so this is unlikely to spur development anyway. He also spoke with one builder
who believes reducing the fees will only encourage builders of low-quality homes to come to Ferndale,
which is not what should happen.
Council member Mutchler said government sometimes works slow, so the proposal simply needed to be
addressed. He said that the building industry is struggling and that anything the council and
administration can do to help would be a positive.
He also noted the proposal would be for a temporary rebate through 2012.
Council member Malpezzi said he wasn’t adverse to keeping the item in committee and invite members of
the construction industry to come speak.
He said he believed that in the long-term, updates to the comprehensive plan and the sewer
comprehensive plan will allow the city to better assess the equity of the impact fee structure.

The committee largely wanted to keep the proposal in committee.
However, because three members of the council requested it be an item on the regular agenda, it was
moved there.
Council members determined that the item will be a discussion-only piece of the agenda that will
include a public comment period for the general public and those in the development community
to come share their thoughts on the proposal.

Feb. 7, 2011 Claims & 2011 Monthly Budget Amendment
Council members reviewed the Feb. 7, 2011 claims run and a 2011 monthly budget amendment.
Councilmember Faria motioned, with a second from Councilmember Ingram, to recommend the
items be placed on the consent agenda. Motion carried unanimously.
Low Income Water/Sewer Discount Program Ordinance – Discussion
Council members reviewed the ordinance, which proposes to expand a 25 percent water/sewer utility bill
discount from just low-income senior citizens to all low-income residents.
Residents must be a utility customer at or below 150% of the 2010 U.S. Federal Poverty Guidelines to
qualify and must provide documented evidence as proof.
Councilmember Faria motioned, with a second from Councilmember Ingram, to recommend
approval of the amending ordinance. Motion carried unanimously.
Election Cost Changes – Informational

Council members were updated by City Clerk Taylor about a revision by the Whatcom County Auditor’s
Office for the calculation of election costs for each jurisdiction on the ballot. Costs are no calculated only
using registered voters in the jurisdiction, and not including number of items on the ballot.
The change is unlikely to significantly impact Ferndale’s election costs, Taylor informed the council.
Committee adjourned at 11:23 a.m.

Public Health & Neighborhood Services Committee Meeting
Held Wednesday, February 2, 2011
City Hall Conference Room
11:32 a.m.
COMMITTEE:
Councilmember Paul Ingram – Interim Chair
Councilmember Jon Mutchler
Councilman Steve Malpezzi

EXCUSED: Councilmember Lloyd Zimmerman - Chair
ADMINISTRATION: Mayor Gary Jensen

City Administrator Greg Young
City Clerk Sam Taylor

Conoco Field House - Discussion

BACKGROUND: Ferndale Youth Sports Incorporated has requested use of a field house near the
Conoco Field Sports Complex that is not being used.
They are proposing to renovate the facility themselves at no cost to the city for girls fast pitch softball
leagues that are very active and growing.
DISCUSSION: Councilmembers were very pleased with the proposal and recommended that staff draw
up a lease with FYS for use of the field house. The lease will be brought back to the full council for
consideration at a later date.
Other – Newspaper Boxes Downtown
Councilmember Mutchler brought up the topic of designating specific areas of downtown and requiring
specific boxes be purchased either by the city or by media vendors (newspapers, real estate guides, auto
sales guides, etc.). The city had been looking into the issue, but asked that the Ferndale Downtown
Association work with downtown businesses to see what they wanted to do.
Some businesses, especially restaurants, like the newspaper boxes specifically because customers grab
a paper before coming in. Not much has happened with the proposal since it went to the FDA, Mutchler
explained.
The city will continue to wait to hear back from the FDA on the topic.
Strip Clubs
Councilmember Mutchler inquired about having city staff research placing restrictions on strip club
facilities in the city.
He was concerned about them being built, though there is no specific proposal at this time for one.
The administration will look into the issue.
.Committee adjourned at 11:56 a.m.

Source: http://www.ci.ferndale.wa.us/Council/Minutes/2011/Council%20Minutes%2011.02.07.pdf

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