Mayor (name not specified) opened a City of Lake Stevens budget retreat by calling the 2026 budget “a difficult budget,” saying the city has spent down prior reserves and must prioritize core services such as public safety and infrastructure.

The mayor said the 2026 proposal focuses on public safety, infrastructure maintenance and investments in technology to improve staff productivity. The presentation showed Lake Stevens’ operating revenues have lagged operating expenditures for several years, prompting use of one-time reserve balances to smooth service levels.

City finance staff presented figures showing a continuing structural gap: the mayor’s recommended budget still showed a multi‑million-dollar operating deficit unless the council adopts proposed revenue reallocations and other adjustments. Staff flagged a recommended change to how property‑tax revenue is allocated — reducing the street fund share from 28% to 14% and shifting roughly $940,000 annually to the general fund — as a near‑term way to support core operations.

Staff described personnel decisions already in effect to help close the gap: 14 currently vacant positions are being held, which staff estimate would save about $900,000 if left frozen through Jan. 1, 2026, and an additional roughly $500,000 if some positions remain frozen until April 1. Department heads said they are cataloging further non‑personnel reductions (deferred consulting, equipment purchases and training) and exploring reorganizations and efficiencies.

Council members and department directors stressed the tradeoffs: police leaders emphasized continuing recruiting and minimum staffing concerns; planning and permits staff said fee updates are already underway to recoup more of their costs; parks and public works leaders warned about deferred maintenance and service‑level impacts if vacancies and project delays continue.

The mayor and finance director told the retreat that the recommended budget is intentionally conservative and that staff will bring updated projections once 2025 year‑end actuals and the effect of the frozen positions are finalized.

Ending note: City staff said they will return with a refined 2026 forecast, more detail on the proposed property‑tax reallocation, and lists of recommended reductions and targeted revenue changes for council direction.