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The City of Mountlake Terrace held its fiscal town hall meeting at the Brighton School Auditorium Monday after the City Council voted to adopt a proposal from city staff to close the City’s $4.2 million budget gap.
City Manager Jeff Niten, Deputy City Manager Caroline Hope and Finance Director Sirke Salminen led the session with four residents, including Councilmember William Paige, Jr., and former Financial Sustainability Taskforce members Jaimee English, Michael Ness and Ellen Lavoie.
The proposal includes:
- A 5% reduction to the general fund (about $1.25 million over 2026-27) through internal cuts across selected departments.
- Raising development-related fees, such as permits, plan reviews and inspections, by about 9% while still staying below neighboring jurisdictions’ rates.
- Using the City’s banked capacity in property taxes, restoring previously forgone levy authority to generate additional ongoing revenue.
- Increasing the Transportation Benefit District (TBD) vehicle license fee from $20 to $40 per vehicle per year to bring in about $315,000 annually and ease pressure on the general fund for streets.
- Creating a rental-reservation program for picnic shelters and the Jerry Smith Plaza near City Hall to generate about $30,000 per year.
- Increasing fleet maintenance rates charged to the City of Shoreline to reflect salary adjustments and ensure an adequate margin. This is expected to add about $30,000 per year.
- Having a voter-approved property tax levy lid lift in 2029 to rebuild general fund reserves up to and beyond the 20% best-practice target.
Details surrounding decisions
City staff discussed how tax decisions from past Council meetings created a pool of unused property-tax authority that the City can now tap to help close the structural gap.
Niten said when the City annexed into South County Fire in 2023, it stopped collecting the EMS levy and reduced the general levy, creating “bank capacity.”
“It’s [money] that we have available to us that they were not taking and therefore can’t earn interest on and can’t [be] used for any other projects,” he said.
Salminen said that each year that the Council does not allow a 1% increase in property tax also gets “banked.”
“Even if the Council takes 1% of the previous levy, that bank capacity also banks another 1% of whatever is in that [original levy],” she said.
Niten said that Mountlake Terrace voted to annex into the South County Fire in 2023 with 92% of the voters voting yes. He then pointed to a slide that showed how bank capacity was used and then refunded over time, including a 2019 levy of bank capacity and a 2020 refund.
Niten said if the City did not annex South County Fire, “it would have been triple the cost” to continue to contract with them.
Lavoie said that the $20 increase a year for the car tab may impact more on low-income residents. “My car costs me 400-something dollars to register every year,” she said. “An extra $20 might be a matter of a gallon of milk, two boxes of cereal, some grapes, maybe some ground beef that week.”
She added that if someone were to get a ticket for driving with an expired registration, that would add extra burden.
“Council thought the sales tax was more regressive,” Niten said. “It would impact lower-income households more heavily than the car tab.”
Lavoie disagreed. “With sales tax, if you spread it out over the year, even if it’s more, it doesn’t seem so bad.”
Ness asked what would happen if the levy lift isn’t passed in 2029.
Hope said that the City may not officially advocate for the levy lift, but staff may share the consequences via newsletters if the levy isn’t passed. She pointed instead to citizen-led campaigns as the vehicle for stronger messaging, using school levies as the example.
Niten said if the levy lift passes, the City will rebuild its reserves above the “20% best-practice level” and stabilize operations budgets.
“By 2030, we need to be able to see that growth in our reserves over that 20% level, so that we have some breathing room. That’s what sustainability is all about.”
The next fiscal town hall will be at the Lake Ballinger Center, 23000 Lakeview Dr., on Tuesday, May 26 at 6 p.m. For more information, visit the City’s Fiscal Sustainability Taskforce webpage.
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