City Council - Special Meeting

Wednesday, November 19, 2025. The time is now 6 o'clock. Could you please stand with me, join Pledge of Allegiance. I she's a flag of America and to the Republic, which is stands one nation under God in the business world with M1C is the roll call of council members, and I will ask our city clerk to please call the roll. Councilman Beaton, here, Councilor Brock Smith. Councilmember Curas, here, Councilmember Hudson, here, Council Member Molinar, here, Council members Tesero here Councilmember Van der Stoop. Yeah. Thank you And 2 is the approval of tonight's agenda. Counsel, like a motion to approve the agenda or any changes? I'll make a motion to approve. We should invite Melissa and a second by Edis. All in favor say I. I'll opposed, say no. Yeah Motion passes. We are on to community comments. So we have a public hearing tonight for the budget. If you're here to talk about the 2026 budget, we'd ask you to just hold tight for just a moment and we'll do any other topics right now for community comments. So if you're here for community comments, come on up to the podium. Please state your name and your city of residence and we ask that you would please limit your comments to about 3 minutes. Hello. Good evening. Um, my name's Alex Glassville. I live in the city of Mount Vernon. Um, what I bring tonight is kind of an issue I feel like is for most homeowners, um, and this issue kind of pertains to building services, building

development services. My, my bad. um and it's the fact that permits are good. I think permits are need to be in certain places in order to keep things in order. Um, but when permits start asking homeowners in unrealistic um, and I think those against homeowner's rights. um, and the specific issue I'm thinking about is, so I live in the flood plain west side, um and I have to get the flood permit Totally fine The problem I have with this flood permit is I'm required to provide a free market value of the cost of my project. Um regardless, if I was to do it myself. which I am um, regardless of the costs that actually paid for the project. Um, now we do live in a pretty expensive state if you ask most homeowners. um, and contractors are through the roof. I know I'm in the lumber industry. Um, so with that, homeowners. if they can do it and they know how to do it well, they'll do it themselves. but if the city is gonna require me to present a free market value of what a contractor would cost materials and labor, regardless of what I pay. I think that's not right. because in my opinion, and again, it's just my opinion. Any homeowner and I guarantee you 80% of the contractors go to Home Depot They upcharge the material cost for not very good lumber Um, and that is considered

free of market value. Now, any homeowner can go to Home Depot, pay the same materials. and put the labor in, and yes, there's no labor cost, but the point of doing it yourself is to avoid labor costs. So I know that the process too is once I give this cost of project that determines prices of permits, which that's fine. It's a job that's required, but if the purpose is to try to gain more out of the homeowner. I feel like that's not right. So that's the issue I present. tonight for the city council Great. Thank you, Alex. Yeah, appreciate it Understand we have at least one person online who wishes to give public comment before we do that, is there anyone else in council chambers who would like to address City council. OK, with that, I'll ask our participant online to please unmute, um, and go ahead, you have 3 minutes if you'd please state your name and city of residence. Do you have participant who's still hoping to speak. Hi there. Yes, my name is Kelly Lowenstein I'm a resident, uh, educator and mom here in Mount Vernon. Um, I just wanted to share, I have comments later for the budget hearing, um, but first I just wanted to share an idea and suggestion, which is that um I've been pretty active in the local elections recently, and one of the things that came up over and over again in conversations with community members was not being able to keep up or feel like what's going on in city council is accessible, and one of the things I think about when I go to the public

library is that that entryway space is an underutilized opportunity for making that work really publicly, um, available, and so I just wanted to present the idea of using the entryway space right as the public walks into the public library. That's a place that people are going into anyway. They don't need to go out of their way to access that information. Um, and so how could we take advantage of that space as a way to make the work of the city council, um, and the mayor's office and our public services more visible and more uh clearly communicated to the public. Thank you. Thanks, Kelly. Thanks for thinking of that idea. That's not a bad one. is Isaac with us this evening? Is he in? OK. We will pass that along to our library director. All right. Anyone else here for community comments? OK, seeing none, we will move on to new business. and 4A is a public hearing for the 2026 city budget and our city finance director Doug Valesky is going to introduce this item. Hello, Doug Thank you, Mary. Good, good evening, council members. I'm excited to be here tonight to um so the city of Mount Vernon is required to hold a public hearing to discuss the 2026 proposed budget. Following a public hearing and discussion of the proposed budget, city council may then adopt the budget which must be adopted prior to the beginning of the ensuing year. During discussions with city council in the past few months, there has been some adjustments to the preliminary budget document. These adjustments are also included in your attached budget summary document as well as in the public hearing presentation that I'll be giving tonight. The preliminary budget will continue to be adjusted according to council's direction prior to adoption with a detailed list of these

adjustments, and I will be going over all the adjustments that were made to the preliminary budget, um. tonight. So with that um first wanted to go over just kind of the budget process. So it's many, many people in the city are involved in the budget process from the frontline workers working with their managers and their directors, making sure that everything is um um accounted for, what kind of uh goals need to be met with finances and trying to take care of that. Um, our budget, just a reminder, is a zero-based budget. We don't start with the base budget from last year and then it, you know, make changes. We start at 0 and only budget for what is needed. Um. after all those, um, discussions at the department level, they move up to the the director's um um to with the mayor, the mayor's office, where they go over, um, all the, the budget that's presented from the mayor's budget it's been a full year process this year because we knew there was going to be some issues coming here and it's kind of diff what's been very difficult with there's really no new initiatives in our budget this year, just a lot of major cuts, um, and, and then we'll talk about the changes that were made to that, and then from there, the mayor brings his budget to the council for discussion and approval. Doug, if I could just cut in for a second, I want to kind of underscore something that you have said, which is that, you know, that process, that budget process that normally is something that begins in late

summer, early fall on a normal year, um, did begin, uh, a lot earlier this year. Um really, we started taking uh a focused look at this budget back in late 2024. So, um, around this time last year, because that's when our finance director Doug, alerted us that we were already anticipating a significant 2026 budget shortfall. Um, and so we decided earlier this year, we could not waste any time. We began implementing a few even more fiscally restrained strategies than we already were that that would help to carry on our mission to provide services and also to, to try to bridge the gap, um. which was the largest projected budget deficit in the city's recent history. So along with that, we took substantial steps toward intentionally alerting our residents when that when it came to providing these 24 hour 7 day a week services. something needed to give. because the, the city was already operating at such a bare bone staffing level. We were, we were going to either need to identify a way to increase revenues, or we would need to make some really difficult decisions around making cuts to public services. So a great deal of thought and sacrifices have been made in the past 10 months by a number of city departments in their respective directors and staff members, and through those sacrifices we were able to bridge the, the deficit in the gap and balance the 2026 budget without laying off any employees. I

I said last fall, and we all said it repeatedly this year, the negative financial trajectory was unsustainable. And so we decided later this year, in the middle of this year, that we would ask our residents a simple question Would they be willing to fund the increased increasing demand for city services at a level that are 36,000 residents require or would they instead prefer the city to scale back many of the basic services that we, uh, that we are already trying to provide. with our limited services to our city. Um, staff and city council and I made that urgent decision this past summer to put that question to our residents in the form of a November ballot proposition. and last week we, we got an answer. from our residents. Our residents told us that they want to see Mount Vernon's public safety services, police and fire get funded and staffed at a more adequate level. They told us that the current low level of funding for our parks and public spaces was inadequate and that it's time to start addressing the long list of items on our deferred maintenance list. It's time for us to begin looking like the city that we want to become. And so for that answer that the voters gave us a week or two ago, that answer to our question, I just wanted to publicly thank the voters in the city of Mount Vernon. Your yes vote on this levy lid lift is a statement of value, and it's a statement of trust. and I want our residents to know the, the immense weight of that responsibility that we all feel uh

moving forward with a sustainable plan that's going to accomplish all of the goals that we share for our city, and to do that while sensibly managing what has been entrusted to us. so that the next mayors and the next city council members and the next finance director. so that our future residents don't all find themselves stuck in a similar position. We don't want to go back to that place. And so we commit to continuing to provide Mount Vernon residents with the same access and transparency and accountability that's available to them now. and we absolutely plan to continue partnering with them in utilizing these precious resources that are going to be conservatively utilized to transition this city into a place that even more of us will be, will be proud to call our hometown. So thank you, thank you for that. Um, and with that, Doug, um, let me know if I can interrupt your presentation anymore. Anytime,. So, um, thank you, Mira, and, and just again to, to reiterate that um that the reflection of, of the levye is presented in this budget that I'm going to be talking about tonight, so. um, but first of all, just, just a little reminder for those out there that um hadn't seen this before, um. in our preliminary budget, um, we kind of for the general fund broke things out as non-discretionary budget items versus discretionary, but um budget items. Um, non-discretionary things that we pay for as far as salaries, benefits, um, contractual agreements, maintenance, um, debt service, etc. and then non-discretionary things that we actually have control over things that we can um uh manipulate like I'll estimated overtime expenses, except for those from public safety operations, offices up pl ies minor

tools, equipment, um, non-essential professional services, those types of things, and throughout the years, every, I present this every year, that number we cut this number lower and lower and lower. Well, we're down to 3.1%, um, with the, in the preliminary budget that was presented of discretionary budget items. Um, so there's not much, there's not much out there left, left to cut. So, um, just wanted to bring that up and um and then I'll move on and discuss our preliminary budget. So our preliminary budget, um, citywide budget is $92,979,109. Our governmental operating budgets, which includes the general fund, parks, library, and streets, um, is $50,216,251. Um, our governmental operating funds reserve estimate estimates an increase of 1.6 million this year while in last year in 2025, the city budgeted a decrease of 1.9 million of reserves. There is right now an estimated general fund balance at December 31, 2026 at being about $6.7 million. That's 18.3%, which is within our 15% policy of reserves that we have to have. With that just a little break up of our revenue sources, um, so these are our governmental operating funds and um you know, you can see the majority of our revenue does come from taxes. We have property taxes at 28%, sales taxes at 20%, um, utility and other taxes at 11. We have some charges for services and um um intergovernment revenue, but um the majority of all of our revenue revenue for

governmental operating funds is property tax, or excuse me, our taxes. of that dollar amount, um, 61% of that total budget for a governmental operating goes to public safety and criminal justice. Of that 61%, 30% of it goes to the police for 25% to fire, um, 2% to other, and 4% to criminal justice. And then um the major and then the, the remaining um percentage, you know, goes to like development services 6% um and, and as you can see on here, I won't go through all of them. Parks in Richmond, 6%, library, 4%, um, but 61% of of our budget as should be goes to public safety and criminal justice. So what's all included in this budget? While the passing of the proposition number one, the levee lid lift, um, increase our property tax revenue of $2.9 million and general fund expenses increased by $1.5 million and I'll go into great detail on these things in in a bit here. Parks and and rec fund the property tax increase of 1.5 million and expense increase of over 167,000. We are assuming that our sales tax remains at the 2024 and 2025 levels at just about $10 million. and um those of you who don't know, we do have a a vacancy savings that we apply to our budget, and it's a negative number that goes against our budget to um that we try to hit to make sure that we have vacancy savings enough to account for a certain percentage That amount has been lately for recently

um years passed at 4% and this year we brought that down to 3% because there's really not, we really don't have um vacant positions as much as we do and the ones we have, we still are remaining open. So also um, affordable housing and uh related services financed through restricted sources coming from 1590 and 1406 funding. These are all entities had to apply for the the city grants and were selected in a awarded by city council, um, we do have a city IOS program that um does get a portion of this also for $703,000 Skagia Community Action at 474,000. The Oasis teen shelter for 100,000. New Earth recovery for 200. Welcome home Skagget for 68, Salem Lutheran Church for 120, the Mount Vernon Manor annex 100, 000 Skagitt County Family Promise 125,200 Children of the valley, 25,000. United Way of Skagitt County, 37,600, and Martha's Place for $65,029 for a total of just over $2 million. And again, these are uh financing for this are coming from um restricted sources. This is not out of the general fund. Also included are street improvements that utilize different grants and also our transportation benefitin District funding, and this year we have included it in our budget local street improvements of a million dollars. Riverside Drive improvement projects for 890, um, Division Street and SR 536 bridge planning for $200,000. 15th Street sidewalk improvements for 150. Laventure Road widening, um, for 125 88 sidewalk

transition for 100, um 30th Street Improvement 65, um, and then we have, you know, sidewalk gap program, the signal maintenance program, um, street lights and and police department camera installation and then there's improvements for lighting on our coin Trail for safety, um, a total of all these come to about 2.6, almost $7 million. So including the new FTE that were included with the levee lift to prove that I'll go over, um, these are, this was also um increases to the budget. wages, benefits, and overtime of $2 million. Our public defense contract right now is running almost $900,000. There was an increase this year of 370,000. um, repair and maintenance contracts for 363 Insurance 286,000 continued comp planning for 390. Skagitt County waste disposal fees going up $200,000. Public utility services are estimated to go up about $85,000. The 911 center, um, fees to um the city are 7 going up 76,000, um. professional service contracts that we have that are obli um we're obligated to um pay for, um, they've gone up $71,000 and then that offset um for vacancy savings going from 4% to 3%. That's actually a negative, uh, um, a decrease. So, um, that was $300,000. So these are increases that um this covers all of our funds, not just the general fund, but as you can see here, we, there's increases that we really don't have a lot of control of, and these are the major ones that come in about 4.2 million. There is one new FTE

request. It's actually um a funding change and this is in our attorney's office. Um, we have a, a one FTE, a prosecutor. It was a limited term position that was hired with AARPA funds to help with the backlog of prosecution cases during COVID. Now that there's no longer any AARPA funds remaining. The city is requesting to fund this position in the general fund. So the total funding request for this oneFTE prosecutor is the amount of $137,043. Doug can I have you just pause there for a moment? I'm gonna ask city council if they had any questions about anything that's been presented to this point. OK, feel free to, to raise a hand, wave a hand, flag me down, and we'll absolutely. I tend to talk fast, so I. free to stop me Um, other things that we have in our budget that um um our medical premium increases. So our medical um insurance to Regents has gone up 8.7% for next year. Our left trust is 5%, Delta Dental 4.3% and Willamma Dental for at 7.6%. And again, all these numbers are included. Also, what's included is in um the additions for the Levee lid lift, um, our levee lid lift was very specific to fire, police, and and parks. We, um, you are, I'm gonna go in all these in detail when I present the the changes that we made, so I'm not gonna do that now. You have the sheet. I also put it in your um packet today. I just wanted to point out that there is one additional um line item that's in here that you did not have last week that we added, and that was in parks. There's additional operating

expenses, um who can't get this mouse to. Well, it's for $7,900,650. That's additional operating expenses from ARPA. These are expenses that um um we're we're not that we're included um with AARPA funding in 2025 budget and part of um a lot of maintenance stuff this is is in here and supplies things to that when the levy passed was I, it was missed before, so we that that needed to get added back in if the levy passed. So that this is just uh actually a small amount of it, but these are the things that Director Berner thought it were most needed. So that number you're not familiar with. I, we just added that this week. Um, and but the rest of that, nothing's nothing has changed. So what's not included in our budget? Um. so with the passing of the levee lid lift, the city still has not funded. We have 12 vacant positions. These are not positions that we're laying off. These are actual positions that were never filled and that we chose not that we chose not to fill this year um to to show some savings. Um, again, these are not funded in our current budget. We still have 4 police officers. These were new positions that were just never filled. Um an office assistant to, um, in the fire department, the public works had a senior engineer and a facility manager, development services head of building inspector, a permit tech, and a part-time associate planner. Parks had a few just very seasonal employees. Um the library has a, um, a part-time library assistant and then um fiber optics, um, we

have one vacant position that we chose not to fill or fund and then there's another new position that was never filled. So with these positions, that's about $1.3 million that are still not that not included in the budget. Um, I also want to point out that, um, you know, as well as all the operating costs across to all the other divisions and departments, um, which are um a lot have not been included in, so there's still operating in budgeted at those low amounts after their cuts. As far as vehicles and equipment go, um, there's been no request for new vehicles or equipment in the governmental operating funds that are included in this budget, except the following. And again, this is the governmental operating funds. Um, I have a note there on the very bottom right there in your binder um under your um if you look in the ERNR page 2 that you'll get a full list of all the other budgeted purchases as far as like from wastewater um um solid waste, streets, etc. Anyway, um, but what is included is a new K9 vehicle with equipment estimated to be about $100,000. This purchase is to be funded with the opioid settlement monies that the city has received. The police also have a vehicle for $75,000. That is going to be funded with an EV grant. Um, Parks and Rec, those 1st 3 items there, the John Deere mower, the pickup, and then the John Deere 6-foot mower. These are items that were included in ER&R. They're um already specifically budgeted and were paid for from ER&R. but included with the levye lift is a field drag that they are requesting for $60,000. Um, there's still a need for the police fire command vehicle

that is not included in this budget. That estimated cost. Um, we just got new estimates, went up to $881,000. And then, but as far as an alternative, we're still looking at different um purchasing plans we're looking for more cost effective methods such as evaluating leasing and state financing programs that um I actually did apply for state financing, see what that's going to be and how that would work for us. And then we also have a leasing program that we're looking at that I'm going to start, we'll start diving into it in in January to see what, if that's the place we want to go on that. So you'll be hearing more about that later. All right. So, um, let's talk about the property tax. So just a reminder, our current property tax, um, that we're collecting in uh this year in 2025, um, last year there was an assessed value of $5.9 billion. Um, we had 1% allowable of 93,000. There was new construction of 27,000. It was a refund levy of $2,000,900 And then um consul chose to use the bank, the remaining bank capacity that we had at 406,000. So our 200 25 levy amount was $9,475,709. That equated to a levy rate of 1.5853. So this year with the ballot measure, um, that was passed, um, the assessed value is 6.221015, um, a billion dollars. instead of the 1% allowable, we

asked for the levy lid lift The 1% is the lid and so we ask that to be lifted higher so that came to $4.5 million. All new construction is included in the lift. So normally, um um, we have the way Washington works, we have a um a levy amount that the city collects. and that's based off of the assessed value every year that's what we get. And if ce values go up our rate drops. The city still just gets that amount plus if the 1% allowable. Um, if um assessed values drop, we still just get that same amount. So it, it doesn't change. This year, for this levy lid lift, it was a little backwards. Next year it'll go, but I just talked about voters approved a rate of 2.2537. So as um Nua says values come in, um, new construction came in. Um, they take all of that and they multiply it by the rate that the voters approved for. So that's why we're getting the amount, the dollar amount there that you're seeing there, that $4.5 million. Also included um is uh the senior disability exemption. levy. Um, we're gonna have two levies from now on, the one that has the levee lid lift and then the senior disability exemption levy, which is excluded from from that. So that amount, the value of that was $93 million. That's about $148,000 and they will continue to pay the 1.58 for 2026. Any questions on

that? I'm gonna keep going through here on these, but council member, yes. do we plan on doing any sort of education for residents here in the city about that exemption about letting people know, um what they can, they, because they don't, they don't have, or do they have to apply for that? They have, um, they worked with the county, so if they uh apply with a county and they're they're the ones who determine if they qualify or not. And I don't know, I, I sent an email to you guys um, there was some, um confusion on my part, uh, about, um the exemption levy on why it's not applied to the regular levy. So I hope you guys got, got that email because I thought it was it's gonna come up that I got from nice um. Kevin and attorneys were looking at this too and got a nice response from the assessor's office explaining that um the exemption levy does not apply to regular levies. It's only voted increases, so um that's and I I assumed when I was doing this that it applied across the board to to all of it, but they do not apply to the regular levy, so they will still be paying this portion of it. I guess I would just uh throw out there if we had a way to reach out to residents. to let them know, um, how to apply for that exemption. All right. No, yeah, that's something we definitely look into. I know we have, I can't remember if we have it on our our bills right now, but um, I know it's on our website and but definitely I know that Danny Hagen does a lot of outreach with that. He's the assessor and he is happy to speak to any

group anytime, anywhere. And he's very um available to educate people. Yeah, they do a really, really great job at, at that too Um, so a combined the total assessed value down there on the very bottom there. It was $6.3 billion and that was a 5.65% increase. So this is just a chart showing kind of a history since 2015 on where we were. You can see from the rate in 2015 and even earlier than that, um, the rate has substant has been dropping year to year, and this is actually the first levee lid lift or voted um um um levy that the city has done for many, many years. So included in this number though is also that uh exemption levy that I talked about But as you can see there in that talk that there um our population is estimated at 36,050. Um, the rate at 2.2537 or run it up to 4, and then our assessed value is 6.3 million and then our total levy went up from 9.475 to 14.168. These numbers, the assess value, um. are the most updated numbers I have from uh the assessor's office. They've they're really great on getting that information out. I received an update on Friday, so this is the most updated numbers. And then this, this um chart just shows the, um uh the assessed value, as you can see is that red line going up as that increases our levy rate drops, that's the um, what's the green color that's on there. And then our

population is the blue, um, in 2026, the estimated again the estimated rate goes from 1.5853 to the voter approved 2.2537. So you can see in 26 way on the right there, um, that is um increasing to the um past um past levy and um and that's kind of looking there, it's kind of brings us right back to about where we were in 2019 as far as um the rate goes. So a little bit, I, I want I wanted to talk about the property tax levy. Um. so as the mayor had said, we started planning for this, you know, many months before, and we had to have a ballot measure that was due to the county, to the auditor's office by August 5th of this year 2025. So we made some assumptions based on that, that, you know, we didn't know at the time. And so what we knew then we included 9 firefighters because we were really hoping for a safer grant that was going to pay for a good portion of that. Um, that did not happen, so that's why we dropped it to 6, I had estimated a 3% assessed value increase, just didn't know what was going to be happening with the economy right now, and that actually came in at 5.65. We had new construction estimated at 20,000, and that actually came in at 65,000. and I had assumed again, like I talked about that the senior disability exemption was across the board, and that was not so um all these numbers were based on, on estimates and on these assumptions on on November 4th, um, the voters approved the 2.2537

maximum levy rate, which equates to an estimated amount of $4.5 million plus an estimated, I said 150, that's the 148,000 for the senior disabled exemption levy amount. Um, so without that, we're receiving a little more than we had than when our previous estimate was which brings us to a few things. It, it creates a lot more financial stability for a longer length of time for the police, fire and parks departments. Um, it also creates an opportunity to meet the needs that the citizens voted for sooner. First of all, many items that were cut from these department budgets, um. the levy littlelift didn't fully restore their budgets, and it doesn't, they're not reflected at all in all the other departments except for fire, police, and parks. Um, but the things that we had talked about that we could possibly move forward on sooner. We could address, in addition, adding an additional police officer or address the need for the command vehicle. Um we could increase the park's capital budget from 500,000 to 1 million to meet the needs of a new playground at Hillcrest in 2026 with safe walking sidewalk connects. Now, that's, that's one that I think after discussion with the mayor and, and uh um director Berner. that was planned for a million dollars every year. We just weren't sure how things were coming, so we put budgeted that at at 500 and I had mentioned to you guys, um, excuse me, to the council that previously that you know, that 500,000 isn't enough to do a big project, but we could be doing a lot Jennifer identified a number of things that we could be doing with that. If we did increase it to the million dollars that was, um, um, previously planned, we could actually, that would be enough to actually finance

that whole new playground at Hillcrest. Um Also, um, moving forward sooner with um things that we talked about as additional part capital projects such as the trail walking path, connections, new skate park safety lighting and ball filled upgrades, and there's still additional trail maintenance that is still needed. And again, this levy does not address the continual and dire need for all the other services um from other departments in the and the city is still going to have to maintain a 15% reserve. So one thing I, I wanted to show to council tonight was um these numbers here, the revenues and the expenses, where what we had used to do an estimate of what we're going to need for um um the 1st 6 years plus, excuse me. Anyway, um, one thing that it shows here is that if um we receive the number that we initially had planned for or estimated at that 3.9, that in 2029, we would hit a breakeven point. where the revenues that came from the levy list, and again this is just for the levy lid lift portion. Excuse me, apologize. that in 2029, we would hit that breakeven point. and then our expenses would start again. going over the um the revenue that we'd be receiving. Well Doug clears his Well Doug clears his. I'll point to uh to the graph at at next year, 2026, how revenues exceed expenses, and it looks great and that's of course

what we're looking at with this budget. Uh it reminded me of city councils in Mount Vernon in years, even decades past, where the next year's budget looked pretty good and so they decided not to take the, say the 1%, the, the one, ability that they have to increase re ve n ue And well, if you do that over time, this graph sort of demonstrates what happens. Um, you, you underfund yourself and you miss out on those um additional increases each, each year, and it compounds. And so I, I can't remember the exact stat, but it, it was something like $10 million that may have been left on the table by not taking those increases. My, my point is that we, we have to look at this graph holistically. We have to look into the future and think about where we're going to be as a city years from now, not just this year. Yes, we have more revenue than expenses. Um, I would encourage you, first of all, not to spend all that revenue. Um, but to consider building our our fund reserve and consider also that list of priorities that we promised the voters for public safety and parks to consider some of those projects maybe as well in there. Doug, did that give you long enough to clear your throat? I hope so. Wasn't there something you can like tag out, to have somebody replace me for a while. Is anybody wants to. Um, yeah, so, uh, city is recommending moving forward with that levy amount associated with the, with the um the rate that was approved by um by the voters So before I move on with all the adjustments is are Yes, yes, council member Brock Smith Awesome, thank you. Um, can, Doug,

what's the, why is the expenses, uh, bigger? Where is this list defined, when you get to 2027, there's a large expense number 4.8. and which stands out a little bit. Yeah, this, this is off of the plan, um I, I, uh, have, I brought this spreadsheet over to just so I could, we could get to that, um. but this is the plan that council had looked at that when we were estimating everything to that we were going to be putting in. 27 goes way up because there's um capital expenditures for the um. fire department that they're doing. So, and, and, um, so it's, it's, it's that previous plan that was approved, and I can show you that could get out of this right now or, or we can show you that later. Um, and I know where to find it. So thank you. OK, yeah, you bet. Other questions. I wouldn't mind going to that spreadsheet if you don't have something else we're lined up right this second. Yeah, no, I'm gonna go to it anyway, but I can, yeah, I can jump to it now. OK, I wanna do that. Oh, no, if you have to exit we'll we'll we'll keep going. Just remind me when we get there that this is what you were talking about. No, there's an easy way of doing this, right? Right? A me Well we'll just go on and then I'll come to that. Because there's a number of things in there. I did want to point out, so. so one of the things that I need to uh um. point out are things that have changed from the preliminary budget. And so what I'm asking in in the um um in the ordinance, um, has these adjustments to the preliminary budget that was presented. So in the general fund, we're asking for

an increase of property tax revenues by $2,978,814 to account for the levy lid lift. Um, there's a decrease of property tax revenue by $11,000 that we're taking out of the general fund and moving it to the library to offset a reduction in funding that came from Skagit County. Human resources, we're asking for an increase in expenditures in the amount of $700 due to an increase in drug and alcohol testing through AWC. In the police department to authorize one new fire, uh, excuse, one new firefighter. Sorry. Authorized one new police officer position and increased expenditures in the amount of $275,198 for salaries and benefits, operating expenses in a vehicle and equipment to account for the approved levy lid lift. In the fire department asking to authorize 6 new firefighter positions and increase expenditures in the amount of $932,670 for salaries and benefits and operating expenses to account for the approved levye lead lift. Um, also an increased salary and benefits to fund a vacant nurse educator position and the amount of $151,891. and a decrease of expenditures in the amount of $50,0032 to reflect a decrease. in what I had estimated the left premiums would be. Um. I believe I had estimated like 10% and they came in at 5%, so. in development services we're asking for an increase in salaries and benefits and operating costs in the amount of 165,247 to fund the

vacant engineering tech technician position. That was a general finding. So now for the parks and recreation, um, fund we're asking for an increase of property tax revenues by $1.5 million to account for the levied lid lift. and increase expenditures in the amount of 1,067,000 to account for approved levy lid lift to include. authorize and fund two new parks maintenance workers and one part-time rec lead position in the amount of $256,503 Fund vacant 1 um fund of vacant one parks foreman and one on-call facility monitor. in the amount of $150,555 Increase operating expenses in the amount of $100,185. and increased capital expenditures $60,000 for a new field drag and $500,000 for a new cap for new capital improvements. Again, these things that I'm talking about right now are on that sheet that we're we're included with there. And that's where counsel could um consider increasing that $500,000 for the capital improvements. The library fund, um, to kind of a wash here, but they're increasing their property tax revenue by $11,000 that we're moving from the general fund. and decrease the in our local library service revenue that by $11,000 to account for a reduction in funding from Skagitt County. Um, in the preliminary budget, we did not, the our um lodging tax advisory council had not met yet, and so it was um in the preliminary budget just

as previous and so um as we've discussed there is a decrease in expenditures by 165,856 to reflect the LTEC actions. And then um in our American rescue Plan Act, or AARPA funding that we will be finishing that out in 2026. Um, the way the city handles all of our interest, um, all of our investments, the interest that comes in is collected and then it gets by satured, it gets allocated out by reserves that are left in there, um, since there won't be any, I took out any interest going to their establish just a $1000. interest that will, that um will not be allocated to this fund at the end. Wastewater utility fund, um, so asking for an increased salary of $104,030 to account for um I missed this in the budget process The benefits were budgeted, but the salary and wages were missed, and I just had a wrong code in there and it didn't calculate the, the salary in there, but it did put in all their um uh benefits. So we're asking for that. And then a J a decrease in operating expenditures in the amount of $95,000 just to help um account for that sal ary increase The ER&R fund, again, this is one that was not included in the um in the preliminary budget, just we left it in there just as it was for 2020 5. there was a decrease in revenues by 39,666 to account for adjustment in the police ER&R contribution. and then decrease expenditures to match equipment

replacement budget and the amount of 1.9 million. and this line item it just was not finalized in the preliminary budget. So with those adjustments, um this just an insert from. from page 11, um, in your summary that you have. As you can see there, the general funds, street funds, and park recreation and library are total governmental operating funds for the budget for 26 revenue is 51,845,000 in expenditures of 50,216,000. We are estimating a fund reserve in December 31st of 2026 at 8.9 million, and that's a $1.6 million. increase instead of I like last year we took 1.9 million out of reserves. This is kind of putting 1.6 back in. And then the bottom line is overall, all funds total um budget of 93,294,000 expenditures of 92,979,000 an estimated balance of all the other funds or all combined at 33 million. and we've budgeted 315 across all of them So with that, just some major considerations um meeting our fiscal policy um, as you know, our general fund has a reserve policy that we have to be at 15%. This is this budget brings us at

18.3%. Our parks at 18.7. Library fund at 10.2 and our street front street fund at 12.7%. So with that, that ends my presentation. I'm not sure if um I can bring up that sheet and we can talk about things or if. comments, public comments, no, I'm not. How do you want me to go? Can you go back to the, the last one? You, you you mentioned, uh, what it was for general fund, right, you didn't really like how much we're supposed to have in parks. I'm sorry Parks library and streets, um, are. policy, um, is, um, it has to be a minimum of 10%. It's it's worded 10% working up to 15%. OK So they're, they're all, they're all met there. OK, great. Counsel, should we go to that uh spreadsheet right now while it's still fresh in our minds and then and come back for let's do that. Is that easy to do? I I just don't wanna, I don't want to just I don't want to disconnect. Oh. hopefully I didn't just, oh everybody's still there, right? Yep. OK Um, so, oh. this is small Um all right. So

sorry, it's kinda here So, um Councilor Brock Smith, to answer your question and, and anyway, this is the sheet that that um was presented um to counsel to talk about um what we were gonna need for the um levy amount. and um it goes in here from, you know, parks, um, a general fund replacement of of um supposed to have color on it. I wanted to pinpoint something here. So, looking at the general fund replacement of 1 million and then capital projects of 1 million, so $2 million each year for parks um, police, it was one, officer each year for the next 6 years, so a total of, um, 6 officers plus equipment in every 3rd officer, they need a new vehicle, so that was included. Um, a general fund replacements for the fire department is are these amounts here all the um the fire engine, defibrillators, uh replacement, self-contained breathing apparatus, um, ambulance, uh, replacement. These are all um included, that's where we can see the difference here in from month or year to year. um and then um and then 6 entry level firefighters at 3%. So the total expense wise here when we were planning it was $3.1 million. It varies year from year based off what is coming across in in all these, in these other areas. So I wanted to talk first of all, this general fund replacement here and then these general fund replacements here. First of all, Parks is a little different

because they're not part of the general fund. They're part of um uh the governmental operating funds, but um, what happens is a big portion of their funding is um um, property taxes. but we have to take out of the general fund and give it to parks to help make them whole all the time. So what this is doing is saying that if we, if the levye came forward, came across, this could be potentially general fund savings because we don't have to give it to them because they're they're receiving it now directly from this other portion of that. Fire the general fund replacement there. That's the their capital fund, so that's also not general fund. These are things though that the general fund paid into to help contribute to this, and we would no longer have to make those contributions because they're included in there. So I hope that kind of makes sense with with those amounts are. but this is um the sheet and um that went to 32,031. and I added up to 2035. It's not on this one. I apologize. I'm glad I sent that one, but I guess I did not. I just did that later um this afternoon. um, just to extend that out to show what it, what it would do. This was the planning document that was reviewed, so I don't and any questions on this. Councilmember Brock Smith, Councilmember Van der Stoop, is this getting at what you were wondering

about or or is it? Yeah, I'll jump in if you can hear me. um, thank you. Uh, thank, uh, I certainly, we looked at this at great length and it went through a couple of iterations and um this all looks very familiar. of course. Um, uh, Doug, uh, interpret the numbers in the end. Is this kind of a zero-sum where um this really accounts for all uh at the bottom, it shows income versus uh cost. It is or fun. So this is, this is, um, adding, this just adds up for the you know, the 6 years that we're in here. Um, yeah, that's the, that was estimated at the time when we were trying to figure out how much we would need, um, the levy amount that would be needed each year. This, this, this, oops sorry, this right here is um when we were just estimating like a 3.9 million and then adding 1% to that each year. That's what that total represents. Is, is that what you're asking me? I'm sorry. No, that's, that's it. Um, let me think about my question for a bit more, but Questions OK. All right Doug, you don't have any other items to present. for this item? No, so maybe just a little before we get into

the public hearing, just kind of talk about tonight. Um excuse me So after this, if council um wants to continue on on this um, I do have that, you know, those sheets here that talk that we list out all the expenditures. So if there's any adjustments you want, I can make those directly into here, which will change our ordinance numbers and and then that'll automatically change the ordinance that you have, so we can go from, talk about that um later. Also, um after this, this public hearing is for our budget, but also for our And so, um um after this public hearing and after we discussed what we were doing in the budget here, then there's the opportunity to look at the resolution for the property tax levy that can be looked at. Mhm. Um. so with that OK And counsel, if you think of any more questions along the way, um, we'll have time to field those as well. So with that, I will open up the uh public hearing for the 2026 city budget, if there's anyone present tonight and 1st 1st in council chambers, anyone in council chambers wishing to speak on the 2026 budget. Come on up to the podium OK, then I will open it up to our online guests. Oh, we have, we have one. Hello and welcome. Hi Uh, my name is Andrea. I live here in Mount Vernon. Nice to see you all again. Um first I want to say that I fully support funding our fire department, and they fully support funding our parks. Um, I was

uh, hesitant to vote yes on this for the funding of the police department. I will take it for what it is to get the parks and the police department or the fire department funded. Seeing that they're, and maybe I'm misunderstanding it, but that there will be an unexpected uh increase or we might have um money to potentially hire. a 7th officer if I was reading that correctly. Um, that's not what I voted for. Um, I agree that I hope that that money will be saved for future possible balancing of the budget issues, um, but I'm gonna request that there were or say that there were a lot of us that were not happy about the increase of armed officers in our community. Excuse me. Um but voted anyways because of the greater issue of the parks and the fire department So just taking that into consideration that we were told it would be 6 officers and I would like to see it not um exceed that. So thank you for your time. Thanks Andrea. Looks like we have one more person uh, coming up. to give some comments on the budget, and I think while we're waiting and he's preparing, I'm going to ask our online guest galley to to please unmute and if you still have a, a comment for the public hearing to share that with us at this time. Hi there. Yes, thank you. Good evening everyone again. Um, my name is Kelly Loewenstein. I am an educator and mom here in Mount Vernon. Um, and I want to call upon the city council kind of extending the comments that Andrea just made, um, to build on the work to date and take a more expansive and evidence-based approach to public safety. As we think about the opportunities afforded by the levee lid lift. I'm wanna say that I'm

really proud and appreciative of our town leadership's consistent stand against ICE and the work around IOS, um, and I wanna encourage us to build on this work in three ways. Number one, most importantly, not locking ourselves into funding an additional police officer, uh, every year at the rate of nearly 300K, including new weapons and vehicles, which, so far as my read goes, was greater than the cost of two full-time parks maintenance workers and a part-time rec lead, um, to the tune of $4 million over the next five years. I want to urge Mount Vernon to draw upon really successful and cost-effective programs that have been uh demonstrated across the country, such as hiring additional social workers and piloting a social work outreach van separate from the police department to address the mental health addiction and homelessness crises that were what I was hearing when I was, you know, doorbelling and talking to neighbors over the course of the last several months, uh, as the most urgent public safety issues that folks are talking about in our community. Um, we saw tonight that over 30% of our budget is already going to the police department, so this is not the area that's underfunded or undersupported, and there's decades of evidence showing that increasing police staffing and police presence, sometimes called proactive policing does not actually prevent crime while it pulls away resources from services that address root causes, and I'm happy to share those uh resources and meta-analysis with council. Um, by investing our new revenue in more innovative solutions like social work, outreach man, and investing more than the current 2% of our budget allocated for affordable and emergency housing. We're going to really address the root causes that citizens in our community were talking about when they talk about public safety. Um, two other key dimensions of public safety and well-being that I would like to see more explicitly addressed in this budget, using the additional revenue from the levee lid lift. One is tree cover and climate resilience. Our region is supposed to be a temperate rainforest. I think Mayor, I've talked to you about this before. Many of our town's neighborhoods have so little tree cover that people cannot walk safely during the daytime in the summer for lack of shade. I know when I was pregnant, I literally could not walk

from my house two blocks to the park at Hillcrest because of the lack of tree cover. This is an essential part of safety too, and I would like us to address it really explicitly with these public safety funds. Um, and lastly, bike mobility and bike safety. I saw, um, mention of expanding and widening La Venture Road even further. This is a huge public safety concern for those of us who want to increase pedestrian mobility and bike accessibility, especially for young people and kids who would like to be able to bike freely uh to our schools, um, and especially with the increase in SUVs and trucks and are already overly wide local streets which encourage fast traffic. Um, that's really unsafe, especially for our children and other folks in the community who want to use bikes. Um, and I'm a member of the Skagit Valley Bike Coalition and as a member of that group, especially, I would like to advocate for some of our safety funding to be allocated towards bike safety and specifically uh towards protected lanes. Um, and then lastly, I would like the public to be provided more detailed information about the $880,000 command vehicle mentioned earlier in the meeting. This is exactly the kind of thing that I would like to see our town not invest further taxpayer dollars then, um, and instead invest again in social workers emergency housing, um, and youth engagement resources instead of additional police officers, uh, tree cover for safe, healthy, walkable neighborhoods and protected and dedicated bike lanes. Thank you Thank you, Mr. Einstein Any anyone else, uh, Kevin or Reid. did we get squared away over there? I'm not sure. All right. Is there anyone at TD 10 or at a computer who has the power to put a graphic on the screen. Oh. uh, graphic on the screen. So TB 10, there was a request for a graphic on the screen, uh, what kind of graphic do we have there, Kevin Ben diagram in color. Sounds harmless enough.

If it's not possible, I OK. Is there's somewhere that we can mail it to? We could do email, we could do, um, yeah, I don't think we have printing capacity here. Do I do you wanna email it to council at Mount Vernonois.gov. We would be able to pull, most of us would be able to pull that. up on our laptops. Thanks, Andrew Good evening, counsel. My name is Kevin Moss. I'm a resident of Mount Vernon. Our voters recently approved a levee lift. Have you guys talked about. That takes our property tax rate up to nearly twice the level of our neighbors in Burlington and Anacortes. That's it. We're on. All right. Thank you, Mr. Mayor I know that our budget requires this rate Unfortunately though, our city contains within its limits a much higher proportion of untaxable property, not in the assessed-based county facilities, community college buildings, Skagget Regional Hospital, and every single school in our district is inside city limits. This is much greater than any of our neighbors. Put simply while Mount Vernon's population is larger than Burlington and Anacortes' combined, those two cities assessed values when added together are about 50% larger than ours. The same dynamic impacts the Mount Vernon School District, its levy levy rates are much higher than neighboring districts due to different relative property tax bases. But there is opportunity. All that untaxable property, the county, the hospital, all

that, that I just mentioned does generate employment, and many people who work in medical or government jobs would live here if we would build homes for them. Mount Vernon can choose to maintain its services without further tax increases if it allows denser housing to be built near jobs. Tonight I brought the Venn diagram showing the iron law of city funding, density, and services. If our city does not allow denser construction in the future. This city will, this council will find itself having to either cut services or raise taxes again, and I think the finance director did refer to that, that over time as services requested by the citizens in are increased the cost of those increases, it'll eventually outrun the levee lift that you just passed. However, if the city builds more densely than it can fund more services and not raise taxes Uh. I wish I, I could, uh, show it on the screen to all of the people in the audience. Next month city staff will likely ask the council to amend the city's code to allow multi-family housing along Riverside Drive and in that northwest corner of town. This will be a good start, but the city needs to embrace denser housing in the highest demand areas near the hospital, near the schools and the college. This does not need to be 100 unit buildings, for example Burlington has zones that caps buildings at 8 plexes will still allowing greater density than almost anywhere in Mount Vernon. besides the initial sales tax impact of new construction, new residents, and new dwellings generate sales tax

revenue from shopping online and from shopping in town Also, they pay utility taxes and they pay more property taxes. I urge the council to hold staff and our consultants accountable for working carefully through the comprehensive plan process that takes a deep look at increased density throughout the city. Our plan is already late, but that's no reason to rush through nominal changes. We should carefully plan for more housing close to employment centers. This will improve services and reduce tax rates for our residents. The school district will benefit as well, but only the city can change housing code. So this depends on you. I know some of you won't be here next year, but, uh, for the rest of you, let's get that comp plan right. Let's build denser, hold down taxes, improve services. Thank you. Thank you, Mr. Moss. Anyone else Right I will close the public hearing for the 2026. city budget Doug comes back up. I'll ask counsel if they have any questions that have come up. Yes, Councilorer I'm interested in your projections long term, um, kind of, as we're referenced there about when we have that break even point. My, what I'm wondering is that right now the private sector is wrestling with how changes will occur. as it pertains to AI. Are we in

city government imagining what those changes or those shifts are gonna be. for governments. Does AWC uh give us any sort of direction or maybe what that looks like from what I've observed, uh, I think is more information has become available, that yeah, there are some agencies that are trying to get that information out but for where we are right now and and trying to guess or predict where things might go. I think it's more of an awareness piece. We need to be aware of what's going on and and develop some policies early um for, for what we do know versus what might happen. So we're watching, yeah. Yes, Councilmember managed to. Hey, um, how hard it would be to go over any major vehicle purchases that were projecting over the next like 4 or 5 years. Would that be an impossible task to ask you to do. like right now? Well, at some point. Yeah. Um, the $100,000 command vehicle. How much is a fire truck? About a million dollars. And then what's the cost of a new police officer vehicle? Is that about 1000 ? Is that right? Well, I, I maybe 100 g fully loaded. I mean, with all the equipment. 7580 Yeah, that 100,000 was for a K9 unit fully load they have special equipment in there, so that's why they estimated 100 for that. Gotcha. OK. But it's just a lot on vehicles, not that that's a bad thing. Um, but that's a lot of money. Yeah, and that's, and that's one of the reasons why we didn't put a lot of that in the budget because I really want to start in January concentrating on looking at those different possibilities of funding and leasing programs for mainly it would be for um non-CDL driven vehicles

Um, but definitely an area that I think that's why there's so little in the budget this year for that because we need to, I want, we need to look at that. And just if you don't mind, if, if nobody else has any other pressing questions, not to pick on police, but you guys drive a lot. Um, and so, uh, I'm guessing um the life expectancy of a new police vehicle cannot be actually all that long. It has to be what, 4 or 5 years? Yeah, that's a, that's um just doing quick math, maybe 15,000 $20,000 a year out the door with every new purchase. That's yeah, I would be interested in figuring out but not that there is anything to figure out, but if there was, man, that sure would be a nice savings. Yeah, and I, and I think there is going to be some savings associated with moving to that leasing a lease leasing program for that. Um, and newer vehicles, less maintenance, um, there's some drawbacks though too, so I just, we need to weigh those out with um um you know, at the, at the department level for everybody but yeah, I'm welcome to get input and share uh um any of that stuff, so absolutely. And that's up and coming. That's coming 2026. Yeah, we have, I have a meeting with them. I, I push it out cause because of budget, um, I believe on January 8th and then, um, hm, a meeting with staff at on January 15th. You're so amazing. Of course you already have this all lined up. I don't even know why I'm bothering you, um, I, I do have one additional if nobody else has anything else. Any other one and then we'll go back Oh, as far as the, um, fire vehicle goes and and once again, don't wanna call you guys out here, um, but that ladder truck, hopefully at some point we're going to have some more cooperation among the cities, and if that happens, we still need

to budget for that fire truck ourselves exclusively. So yeah, not the answer. And the reason I would guess that we would is if there was a, a regional fire if we converge, um, I think each, each municipality and district would bring their own assets to the to the table. And so it wouldn't, and we need it in the meantime because we don't have a timeline on an RFA. We explore RFA possibilities, it changes a lot of things. A lot of things, uh, in terms of uh resource vehicle requirements, because now instead of several agencies that are doing the same thing and need the same equipment, it's one. Mhm Gotcha. Maybe some stuff to explore there in the future. OK, then good news. All right. That's it. Thanks, guys. Yes, something that I would like to explore, um, as we look forward to what our budget's going to look like, um, I know that a um neglected part of law enforcement that we want to explore is traffic enforcement and um that, that isn't something that was included in these positions, correct? It, it will be included in the positions as that unit is part of the budgeted officers that, you know, it's part of the mix. And so Chief is is staffing that division. um, as, as we go with some of these utilizing some of these positions. Thank you, chair. Councilmember Brock Smith, I haven't looked at my video screen for a little while. Are you good? You good Um, sure,

I'll, I'll jump back in. Thank you. Um, well, I mean, I guess just a couple of comments to start, you know, that, um, wow how um big of a difference it is when, um, you know, folks, uh, step up and vote for these kinds of resources, um, you know, we we have two budgets. We started without the levy numbers in our budgets. um excuse me, and we were really just right on the threshold of what our fiscal policy requires with 15% in our general fund and 10% down in our parks fund. Um, and so, uh it's, it's just a kind of a new day um for us to uh have the opportunity to provide these additional resources and to have more um financial certainty in the city as well. So I just wanna thank the uh citizens of Mount Vernon who voted and um know that we're uh gonna do our best to live up to the things that we promised we would, we would do. Um, I guess, um, so that sort of second part of that comment was, thank you, and the second part was uh just um uh great opportunity for us, I suppose, um, and do this well. I, I, um, one of the things that sort of recognize when you look at this budget process versus previous budget, um, processes, is that we are always pulling from the general fund and taking it down, down down down, and this one's different because we started at the bottom of our, our, you

know, policy at 15%, and we've been at it able to add up. And so it's um uh more than I think I've seen, um, and that's a good thing for the city, uh, but it does raise for me, are we doing as much as we said we would or that we could, uh, for the city for folks who voted for and for everybody who's going to benefit from these services. And so I, that's the thing that's still outstanding in my mind, is it sort of balance with investing in the general fund, um, versus adding additional things that are directly um providing this levels of service that people voted for with the levy. And so that's still on my mind. Uh, for instance, um, the parks Um, so I'm getting a little bit ahead of myself, um, because I know first on the agenda is the levy rate, and second on the agenda is the budget, um, but the two are, um, linked together. Um so, uh, not a comment on the levy rates, uh. yeah, so thank you Thanks,, member, I think to that instead of the question. being a, a choice we either add to the fund reserve or we deliver the things that we promise. I think, I think it's more of a mixture. We're, we're adding to our fund reserve in this draft so that we can deliver what we've promised in future years. That's my intention anyway. um can I call You can call the question anytime you want, Captain Et Hudson Coordinates 3927. Thank you. I, I, um thank, I'm very thankful to

the citizens who pushed this over for us. We, we so appreciate it. I don't want the city to get in the same position that it was in and where we were. Um, I, I don't wanna leave that to another council to have to deal with. I want to be we are fiscally responsible. We're not willy-nilly spending money. Um, and I take offense when people say that, so, um, excuse me for that. Um, I would like to um move to approve the city budget ordinance number 3927, putting the extra money in our fund balance. I want to save it and use it. um, as we said we would, uh, which I know we will, but I just want to say that I want it, I want it to be used like, like our voters, um, asked us to do. OK motion by Council member Hudson to approve the budget, seconded by a council member Terro any discussion, counsel. OK All in favor, please signify by saying aye I I I opposed say no. Motion passes Thank you Uh moving on to item 4B, the last item under new business. It's the approval of a proposed resolution, 2026 for a property tax levy. Doug has this one. Thank you, Mayor, council members. Um, so city, city staff asked council to adopt resolution number 1087 to set that city's 2026 property tax levy amount. P MRC as part of the budget process, the taxing jurisdiction established the amount of property tax revenue needed to fund the budget. That amount needed to fund the budget is called the levy. It is the total

amount to be collected from the taxpayers by a taxing district. In Washington, property tax increases are not based on the increasing value of the properties. They are based on last year's property tax levy, which is simply the amount of the property tax that was assessed in the prior year. By November 30th of each year, the amount of taxes to be levied by taxing districts are certified um to the county assessor in a dollar amount. In Mount Vernon, our tax levy amount in 2025 was $9,475,709. The county assessor calculates that the levy rate necessary by dividing the total levy amount by the assessed value of property taxes in the district. By law, this number is expressed in terms of dollar rate per 1000 evaluation. The city of Mount Vernon is required to hold a public hearing to review revenue sources for the coming year and to set the property taxes for the coming year. The city held the public hearing on Wednesday, November 12, 2025, and again on the budget public hearing on Wednesday, um tonight, November 19th. for the 2026 levy since the since the city is currently leveling less than its statutory mandatory levy rate of $3.60 per 1000 of assessed valuation, the city chose to implement a levye lid lift. A levee lid lift is not a separate property tax, but rather a way of increasing the city's existing general fund levy above the 1% increase limit. On July 24, 2025, the Mount Vernon City Council adopted Resolution 1078, providing for the submission to the qualified electors of the city to vote on a proposition that would provide funds for increased essential community services and improvements, including city fire and police personnel, Buy your equipment and

parks maintenance and improvements. With voter approval, it would authorize a maximum regular um property tax levy for collection in 2026 at $2.25. $2.25. 2.2537 Sorry. Per 1000 of assessed valuation um the city council chose to exempt senior citizens, disabled veterans, and other people with disability. from the tax increase resulting from the levee lid lift This would increase the total levy amount from 2026 from $9,475,709 to $14,168,468. So city staff recommends that council authorize a voter approved maximum regular property tax levy for collections in 2026 of $2.2537 per $1000 of assessed valuation This recommendation would increase the levy rate approximately 66.84 cents per 1000 from 2025. This would increase the total levy amount by an estimated $4,694,291. The impact of an average home cost of 550,000 would equate to an estimated monthly increase of approximately $30.63 assuming a zero change in assessed value. So Ci um staff asked counsel to adopt resolution Number 1087 to set the city's 2026 property tax levy. Questions for Doug on this before we dig in the bill. OK Seeing no questions,

this is resolution 1087. I'll move to approve Resolution 1087 setting our um levy rate at 2.2537 per 1000. motion by Councilmember Hudson, seconded by a councilmember Tercero. to answer a question I heard just earlier today. Yes, it would still keep Mount Vernon's levy rate lower than Cedra Woolies. I know that came up. Um. any other discussion on this? Well stated there OK. All in favor, say I All opposed say no. Motion passes. Doug. Thank you for your work on this. Thank you What a year. Great job. Thank you. All right, uh, that is the end of our regular agenda. I will ask at this point our city attorney to please call the mayor and council into executive session. Thank you, mayor and members of the city council invite you into an executive session to discuss with legal counsel matters. relating to the enforcement action, litigation or potential litigation to which the city, the governing body or a member acting in an official capacity is or is likely to become a party. when public knowledge regarding the discussion is likely to result in neither adverse legal or financial consequence to the city pursuant to RCW 423,110 subsection 1 I. Executive session will be 15 minutes. We would convene at 7:44, no action after. With that, we will adjourn the November 19th Mount Vernon City Council meeting at 7:29 p.m.