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Lacey council approves housing, wastewater and budget ordinances; awards Lift Station 11 contract
Summary
At its March 20 meeting the council adopted ordinances enabling surplus property disposition for affordable housing, updated industrial pretreatment rules, expanded the multifamily tax exemption program (with an amendment), approved 2024 budget encumbrance carryover, and awarded a contract for Lift Station 11 improvements.
The Lacey City Council on March 20 approved a package of ordinances and one contract award affecting housing policy, wastewater regulation and the city budget.
Votes at a glance
- Ordinance 16‑73 (new Lacey Municipal Code Chapter 2.74) — Disposition of Surplus Real Property for Affordable Housing: Adopted unanimously. Staff said state law authorizes no‑cost transfers of surplus property for affordable housing but requires a covenant or deed restriction guaranteeing permanent affordability and that the legislative authority have rules governing disposition. The ordinance establishes those rules and requires a council resolution to identify any property proposed for disposition.
- Ordinance 16‑74 — Adoption of revised LOT (Lacey Olympia Tumwater Thurston County) discharge and industrial pretreatment regulations: Adopted unanimously. City staff explained the LOT partnership treats wastewater for multiple jurisdictions under an NPDES permit; the ordinance adopts the updated LOT industrial pretreatment regulations into the Lacey Municipal Code and includes wording that automatically incorporates future LOT amendments into the LMC so subsequent LOT technical changes will not require repeated city ordinance updates.
- Ordinance 16‑75 — Expansion and amendment to the Multifamily Tax Exemption (MFTE) program (LMC Chapter 3.64): Adopted (motion carried). Staff presented options to expand MFTE eligibility to the Neighborhood Commercial District, add a 20‑year MFTE option in targeted areas and to remove a 12‑year option cap that previously limited qualifying affordable units to 30% of a project. After extended discussion about how the 20‑year option functions in practice, the council adopted the ordinance with an amendment to strike the provision limiting qualifying affordable units to 30% (staff indicated the language came from state statute and recommended the amendment and also said staff would treat a drafting inconsistency as a scrivener’s error to be fixed in ordinance text).
- Ordinance 16‑76 — 2024 Budget Encumbrance Carryover (first budget amendment of 2025): Adopted unanimously. Staff described roughly $19 million in carryover appropriations for projects and priorities not completed in 2024; highlighted items included $3 million for a regional permanent supportive housing project, roughly $380,000 for police vehicles delayed by supply chain issues, accessibility work at a veteran services hub, grants and capital projects for transportation, utilities and parks.
Contract award
- PW2022‑11 — Lift Station 11 improvements (conversion from vacuum prime to submersible pumps): Contract awarded to low bidder Barcott Construction LLC (Chehalis, WA) in the amount of $1,113,312.39; the project came in under the staff engineer’s estimate and staff told the council they received ten bids. Staff estimated construction would begin April 2025 and described the conversion work — installing a new wet well, valve vault and modern controls — to improve reliability and make use of a generator installed in 2019.
What staff said and why it matters
City legal staff and department presenters framed the surplus‑property ordinance (16‑73) as filling a gap in the municipal code so council could use the state’s disposal authority to advance affordable housing projects while ensuring deed restrictions or covenants protect long‑term affordability. For MFTE (16‑75), staff acknowledged the 20‑year option has been used only rarely statewide and detailed operational questions raised by council members, including how a developer would ensure long‑term compliance and whether selling a portion of units to a nonprofit is practical. Staff recommended removing the 30% cap and agreed to clean up a drafting inconsistency.
Ending: All ordinances and the contract award passed. Council asked staff to clarify MFTE implementation questions and to treat minor drafting fixes as scrivener’s edits; staff said it would follow up with additional details for council records.
