Ferndale City Council

**Administrator Burnett, on government's role:** "Local government is well-equipped to put the right people in the same room and to help create the conditions necessary for success." **Anonymous commenter, on police conduct:** "When someone facing a credible threat to their life reaches out to a chief of police for help, that moment represents the public's final line of trust in the system." **Councilmember Mutchler, on tax policy understanding:** "I would say for myself having been here 8 years ago when we did this is the thought that we're actually increasing property taxes on property owners is a little bit of a pause at the very least." **Superintendent Dominguez, on district constraints:** "We currently cannot run our levy at what we are even allotted because we know it won't pass." **Administrator Burnett, on property tax mechanics:** "Your tax bill goes down a little bit every year because of all of the value of the new construction... it's simply that your tax bill's not go

# Ferndale City Council Grapples with Housing Tax Incentive Amid School District Opposition and Complex Tax Questions The Ferndale City Council's March 16, 2026 meeting unfolded against a backdrop of tension, with both heated public criticism of the police department and intricate policy discussions about housing development incentives that revealed deep complexity in local property tax mechanics. ## Fiery Public Comment on Police Conduct The meeting opened with standard procedural business but quickly turned contentious during public comment when an unidentified speaker delivered a scathing critique of Police Chief Matt Huffman. The speaker, reading portions of a letter submitted to the Criminal Justice Training Commission (CJTC), accused the chief of refusing to help when the speaker faced death threats. "When I reached out to Chief Huffman of the Ferndale Police Department, it was because I had reached my last possible avenue for help," the speaker stated. "A death threat had been made against four of us. The individual who made the threat lived approximately a mile and a half from my home, possessed an arsenal of weapons and had a history that included shooting at people." The speaker described how Chief Huffman allegedly told them they were "on their own" because the matter wasn't in Ferndale's jurisdiction. "When I asked Chief Huffman for help, he told me I was on my own," the speaker continued. "But in that moment, I was not asking for jurisdiction. I was asking a police chief for help protecting my life." The speaker concluded with pointed questions for Mayor Greg Hansen: "Why have you not opened your own investigation into what the police did? You took action when Officer Scott Langton's connection to the Oath Keepers came to light... When questions arose about former Mayor John Mutchler potentially influencing a police investigation, Ferndale opened an investigation. Why not with Chief Huffman?" Mayor Hansen did not respond to the allegations during the meeting. Later, during council reports, Councilmember Ryan O'Leary offered a counter-perspective: "Over my seven years on council, I think I've had one Ferndale complaint about the Police Department and it came from somebody who wasn't in Ferndale, WA. They were complaining about the wrong Police Department. So I just want to say thank you to the Police Department." ## The Multifamily Tax Exemption Deep Dive The evening's primary business item was a comprehensive presentation by Community Development Director Mike Cerbone on the city's Multifamily Tax Exemption (MFTE) program. What began as a routine briefing evolved into a complex discussion about property tax mechanics, growth management, and community equity that stretched well past the typical meeting timeframe. The MFTE program, adopted by Ferndale in 2018, allows property developers to avoid paying taxes on building improvements for eight years on new multifamily housing projects with at least four units. The program aims to incentivize housing development in targeted areas, primarily downtown, to increase residential density and support local businesses. Cerbone explained that since the program's inception, only three projects have applied. One failed to meet completion deadlines, one 18-unit townhome development on Sterling Avenue is nearing final approval, and an 87-unit apartment complex at Washington and Main has received conditional approval pending building permits. "So in the last eight years since we've adopted this, there has been no reduction in anybody's property taxes at this point," Cerbone confirmed to Councilmember Jon Mutchler's question. The Sterling Avenue project would be the first to actually benefit from the exemption if approved. ## Property Tax Mechanics Prove Puzzling The discussion quickly became bogged down in the complex mathematics of property taxation as council members struggled to understand exactly how the exemption works and who ultimately bears the cost. Councilmember Herb Porter attempted to clarify: "The fact that you've got a property or two properties or three that are going to be exempt from paying taxes, that property tax doesn't go away. Rather, it is distributed amongst the rest of the population so that the districts, if I understand correctly, will get what they're asking for." Councilmember Erin Gunter challenged this understanding, noting that the eight-year program doesn't guarantee affordable housing: "This program does not guarantee affordable housing. We don't have to rent or sell at affordable prices. They charge what they want. So I just want to make sure that's clear. It doesn't mean it's affordable." Using the Sterling Avenue project as an example, Mutchler performed calculations showing that with a mill rate of 8.2, the $1.6 million in exempt improvements would save the developer approximately $13,000 annually, or about $728 per unit per year. "That came up to $7,300 a unit, which seemed kind of high because that's an apartment unit, that's more than my house right now," Mutchler initially calculated, before Mayor Hansen corrected the math by noting the mill rate is calculated per $1,000 of assessed value. The discussion revealed confusion about fundamental property tax mechanics. City Administrator Jori Burnett explained that in Ferndale's growing community, the mill rate has generally been decreasing as new construction adds to the tax base: "Our tax bill in 2026 is smaller than it was in 2022. It's been going down because generally values have gone up." However, when pressed about how exempt properties affect this calculation, even staff acknowledged the complexity. "When you start talking about property taxes and mill rates and assessed value and new construction, those become really difficult moving targets to calculate and even harder to conceptualize in your head," Burnett admitted. ## Expansion Request Sparks Policy Questions The current MFTE area covers roughly a quarter-mile radius around downtown Ferndale. A property owner near Legoe Avenue and Ferndale Terrace has requested expansion of the program to include their area, which prompted the evening's discussion. Councilmember Mutchler raised fundamental questions about expansion criteria: "Do we have kind of a philosophical policy or set of principles that guide us as to if we're on our own doing this on the map? Sure, we didn't include that. Why would we now include that other than being asked to?" Cerbone explained that the original boundaries were based on the nationally recognized quarter-mile walking distance to downtown destinations, consistent with Strong Towns planning principles. However, he noted that state law imposes no limits on how large the exemption area could be. "In terms of a thought experiment, we could make the whole city qualify for this," Cerbone acknowledged, though he was not recommending such an approach. He cited Bellingham's strategic use of the program in specific areas like Barkley rather than citywide. ## School District Voices Strong Opposition The discussion took a more pointed turn when Ferndale School District Superintendent Dr. Kristi Dominguez addressed the council, explaining the district's longstanding opposition to the program and any expansion. "We have said every time and my understanding is that we are not for this," Dominguez stated clearly. She explained that the district's opposition stems from commitments made to voters during levy campaigns about how new growth would help reduce individual tax burdens. "When we ran a levy and we'll be coming up against another one. And we did not run it at the full cap because our community was very clear they would not vote for it. They can't vote for it, they can't afford it," Dominguez explained. The district serves a high-poverty population with over 68% of students qualifying for free and reduced lunch, while state funding has been reduced by $90 million statewide. The superintendent described the district's difficult financial position: "Since 2021 we have been underfunded about $21 million in special education. The state has not paid. So the local levies are not going to enhancements. They are going to basics." She explained that during levy campaigns, the district promised voters that new development would spread the tax burden across more properties, reducing individual bills. "When we put our word out to the community that as properties go up, your part of the pie for our levy will go down. That's why we're saying no to this, because it's our word." Dominguez noted that a developer had recently offered to provide direct compensation to offset the tax exemption's impact, but the district declined: "We turned it away, not because we couldn't use it, but because we wanted to be able to say to the community what we said we would do, we will do, and we're going to hold by that." ## Financial Benefits and Service Costs Debated The discussion also touched on broader questions of municipal finance and service delivery. Councilmember O'Leary presented calculations showing that multifamily development is more cost-effective for the city to serve than single-family development. "Anywhere between 1.5 to 1.7 times more expensive to build a single-family house and service it versus a multi-family unit," O'Leary stated. He calculated that even with zero property taxes, a fourplex would be net positive compared to serving four single-family homes: "It only takes four and then after that it's even better." City Administrator Burnett supported this analysis from an operational perspective: "It is more cost effective to serve intense uses at the core rather than in outlying areas. It helps with, you know, water and sewer. You don't need as long a pipe. You don't need to dispatch to those outlying areas." He elaborated on the original reasoning behind concentrating development downtown: "If you're building south of Main Street, you're going to need to build either out of the flood plain, which is going to be an additional cost, or you're going to have to put an entire floor underneath and add parking in order to meet your parking requirements." ## Calls for Assessor Expertise As the discussion revealed the complexity of property tax calculations, multiple council members called for bringing in Whatcom County Assessor Rebecca Craig for a future presentation. "I would recommend that we invite the assessor to come either at the next council meeting or the one after that. Provide some questions specifically to allow her and her staff to research," Councilmember Porter suggested. Burnett agreed this would be valuable: "Having the assessor having the ability to go back to their experts and lay out an example that makes sense, put it on paper so that it makes sense to a layperson I think... would be a lot more helpful." Director Cerbone noted that bringing specific questions ahead of time would be crucial: "Doing math in your head is probably only something that one of us in the room can really do very well." ## Options and Future Considerations Several council members explored options for modifying the program. Councilmember O'Leary suggested imposing a budget cap: "Is it possible that we set a budget for the amount of offsets that we're willing to have at any one time? So for example, if we said the next eight years, we're willing to spend up to $1,000,000 in offsets." Cerbone agreed to research whether state law would allow such modifications: "We can be more stringent than what the state law is. So unless there's something inherent in the state law that keeps us from doing that, I think if you email that question, I've got it now on the record." The program currently has a sunset date of December 31, 2031, after which no new applications can be accepted unless the city council acts to extend it. ## Limited Usage Despite Incentives Throughout the discussion, several council members noted the limited uptake of the program despite its availability for eight years. Councilmember Gunter observed: "We've had some infill, yeah. But I think Sterling is probably one of the larger ones. The 29 units next to ACE, I wouldn't hold up as a fabulous example of developments." The limited usage has prompted the city to reconsider its approach to downtown development incentives. City Administrator Burnett reflected on the original expectations: "We had seen predominantly fourplexes or less, so single family duplexes, and our thought at the time was how do we break into the multifamily where then we get some economies of scale." Economic consultants from ECO Northwest had previously analyzed the program and concluded that achieving vertical mixed-use development downtown would require the twelve-year MFTE program rather than the current eight-year option. ## Moving Forward with Questions The meeting concluded without final decisions, but with clear next steps. Director Cerbone will collect specific questions from council members to present to the county assessor for a future detailed explanation of property tax mechanics. The council will also need to decide whether to proceed with the requested area expansion, what modifications to make to the program's definitions and procedures, and potentially whether to consider options like the twelve-year affordable housing version. Councilmember Porter summed up a pragmatic perspective: "I don't really foresee a big flood of these type of developments occurring in the core district, but you know, time will tell, but at least we should at least hear from the assessor, because I think that will put to rest a lot of the concerns and questions." The multifamily tax exemption discussion highlighted the complex intersection of housing policy, municipal finance, growth management, and inter-governmental relations that characterizes many policy decisions in growing communities like Ferndale. ## Routine Business and Departmental Updates The meeting also covered routine business, with the council approving the consent agenda including March 2 meeting minutes, payroll authorization, and a contract for Safe Streets for All Action Plan consulting services with Transpo Group USA for $99,800. City staff provided updates on various projects and events. Public Works Director Kevin Renz announced that concrete would be poured for the civic campus floor later in the week. Communications Officer Megan Juenemann reported on a successful youth disc golf clinic and an upcoming community game night. City Administrator Burnett noted that he, Mayor Hansen, and Director Renz would travel to Washington, D.C. for annual advocacy meetings, where they would address some of the same state and federal funding issues affecting the school district that Dr. Dominguez had described. The meeting reflected the ongoing challenge facing Ferndale and many Washington communities: balancing growth management goals, affordable housing needs, infrastructure costs, and the tax burden on existing residents while navigating complex intergovernmental relationships and funding structures.

### Meeting Overview The Ferndale City Council met on Monday, March 16, 2026, with the main focus being a detailed presentation on the city's Multifamily Tax Exemption (MFTE) program, including a property owner's request to expand the program area. The meeting also included public comment addressing police department concerns and routine business items. ### Key Terms and Concepts **Multifamily Tax Exemption (MFTE):** A state-authorized property tax waiver program that exempts developers from paying property taxes on residential improvements (buildings) for 8, 12, or 20 years to incentivize multifamily housing development. **Mill Rate:** The amount of tax paid per $1,000 of assessed property value, calculated by dividing the total levy amount by the gross assessed value of all properties in the jurisdiction. **High Injury Network (HIN) / High-Risk Network (HRN):** Maps identifying locations where crashes with severe outcomes occur or where conditions create elevated crash risk for all road users. **Target Area:** The specific geographic zone where the MFTE program applies, currently centered around downtown Ferndale within approximately a quarter-mile radius. **Assessed Value:** The dollar value assigned to property by the county assessor for tax purposes, split between land value and improvement (building) value. **Gross Assessed Value:** The total assessed value of all properties within a taxing jurisdiction, used to calculate mill rates. **Safe Streets for All (SS4A):** Federal grant program funding comprehensive safety action plans to reduce traffic deaths and serious injuries for all road users. **Sunset Date:** The expiration date for the MFTE program, currently set for December 31, 2031, after which no new applications can be accepted without code changes. ### Key People at This Meeting | Name | Role / Affiliation | |---|---| | Greg Hansen | Mayor | | Jori Burnett | City Administrator | | Mike Cerbone | Community Development Director | | Susan Duncan | Administrative Services Director | | Herb Porter | Councilmember | | Ali Hawkinson | Councilmember | | Erin Gunter | Councilmember | | Ryan O'Leary | Councilmember | | Jon Mutchler | Councilmember | | Dr. Kristi Dominguez | Ferndale School District Superintendent | ### Background Context The MFTE program was adopted by Ferndale in 2018 to encourage multifamily housing development in the downtown core area, with the goal of increasing residential density to support local businesses and create a more vibrant downtown. The program exempts developers from paying property taxes on building improvements for eight years, with other taxpayers absorbing the cost through slightly higher mill rates. Despite being available for eight years, only three applications have been submitted, with just one project nearing completion. Now a property owner is requesting expansion of the program area, prompting this comprehensive review. The school district has expressed opposition due to concerns about reduced tax revenue and their inability to guarantee voters that property taxes will decrease as promised during levy campaigns. ### What Happened — The Short Version Community Development Director Mike Cerbone presented a detailed overview of the MFTE program, explaining how it works, its limited use to date, and a pending application to expand the eligible area northwest of downtown. The presentation sparked extensive discussion about the program's financial impacts, with Administrator Burnett clarifying that while participating properties don't pay taxes on improvements for eight years, other taxing districts are "made whole" through redistribution rather than losing revenue outright. School Superintendent Dr. Dominguez spoke against expansion, citing the district's financial constraints and promises made to voters about tax decreases with growth. Council requested the county assessor attend a future meeting to provide detailed explanations of the tax mechanics before making any decisions on expansion. ### What to Watch Next • County assessor presentation with detailed tax impact analysis at a future council meeting • Public hearing on the proposed MFTE area expansion (no date set yet) • School board letter expressing formal opposition to program expansion • Potential consideration of program modifications or caps on exempted value ---

**Q:** What is the current sunset date for Ferndale's MFTE program? **A:** December 31, 2031 — after this date, no new applications can be accepted unless the code is changed. **Q:** How many MFTE applications has Ferndale received since 2018? **A:** Three applications total: 29 townhomes (failed to complete), 18 townhomes on Sterling Avenue (nearly approved), and 87 apartments at Washington and Main (conditionally approved). **Q:** What are the three time periods available for MFTE tax exemptions in Washington state? **A:** 8 years (market rate housing, no affordability requirement), 12 years (requires 20% affordable units), and 20 years (requires 25% permanently affordable for-sale units). **Q:** Which MFTE program did Ferndale adopt? **A:** The 8-year program with no affordability requirements, promoting market-rate housing. **Q:** What is the walkable distance metric used to define the MFTE target area? **A:** 400 meters or approximately a quarter-mile, which is nationally recognized as the distance people will comfortably walk. **Q:** How much was the Sterling Avenue property worth before and after development? **A:** Before development in 2023: $432,000 total assessed value. After completion in 2025: $2.1 million total ($500,000+ land, $1.6 million improvements). **Q:** Who spoke during public comment about police department concerns? **A:** An anonymous individual who criticized Chief Huffman's handling of a death threat investigation and the city's lack of internal investigation. **Q:** What is the maximum contract amount for the Safe Streets for All Action Plan? **A:** $99,800, funded by federal SS4A grant funds with required local match. **Q:** Which school district official attended the meeting? **A:** Dr. Kristi Dominguez, Ferndale School District Superintendent. **Q:** What percentage of Ferndale school students qualify for free and reduced lunch? **A:** Over 68%, making Ferndale one of the few Washington districts fully funded for free breakfast and lunch for all students. **Q:** What was the 2026 mill rate mentioned in the meeting? **A:** 8.23 per $1,000 of assessed value, compared to 8.99 in 2022. **Q:** How much new construction was added to Ferndale's gross assessed value in 2026? **A:** Approximately $80,930,000 in new construction. **Q:** What date is the fire department's spring pancake breakfast? **A:** Saturday, April 25, 2026, from 8:00 to 12:00 at Station 41. **Q:** Where is the proposed MFTE expansion area located? **A:** Northwest of the existing area, primarily along the Legoe corridor near Vista Drive and Siddle Street. **Q:** When is the community game night at Pioneer Pavilion? **A:** Friday, March 20, 2026, from 5:00 to 8:00 PM. ---