Council opens public hearing on proposed 6% utility tax; staff say it will not solve long‑term imbalance alone

Sammamish finance staff opened a public hearing on proposed legislation to implement a 6% utility tax across utility categories and a companion use tax on brokered natural gas, laying out projected revenue scenarios and a proposed low‑income rebate program.

Vicki Carlson, finance director, told the council the city faces a structural general‑fund imbalance and that a community fiscal task force recommended three phases to restore sustainability: deep budget reductions already made, an automatic council authority utility tax (phase two), and a later voter‑approved metropolitan park district (phase three). Carlson said the proposal uses a 6% rate because state and local caps make that the highest rate council can impose without voter approval for electricity, gas and phone.

Carlson provided household examples: a household with about $300 of monthly utility bills would pay roughly $18 a month under a 6% tax; a household at $900 a month would pay about $54 a month. She said the city lacks exact utility provider data and used Mercer Island’s utility mix as an estimator; final revenue will not be known until collections begin.

To reduce burden on lower‑income residents, staff proposed a rebate program that uses enrollment in existing low‑barrier programs as proof of eligibility instead of tax returns. Carlson said research shows about 800 Sammamish residents currently qualify under those programs and that the city’s proposed rebate amount would be similar to neighboring Issaquah’s $100 annual rebate. The ordinance as presented includes both the 6% right and a low‑income rebate program; staff also intend to draft administrative rules for collections and delinquencies.

Public comment and agency feedback: Residents and utility stakeholders appeared online and in person. Mary Wichter, a longtime resident, urged the council to adopt the tax as part of a package but questioned how stormwater fees (a King County fee of about $475 per structure) would be taxed. Sammamish Plateau Water Commissioner Navotel, who said he worked for Bellevue for 30 years, urged the council to reconsider taxing essential services at 6%, calling for a smaller tax on water (3%) and no tax on sewer because water and sewer customers already face significant rate pressures, including anticipated King County wastewater increases of roughly 12–12.5% annually for several years and a planned PFAS treatment plant estimated in the tens of millions of dollars.

Paul Stickney, a resident who has tracked city finances, asked for clarification of budget reductions and whether reported vacancy savings were actual long‑term cuts or temporary non‑fillings. Councilmembers pressed staff for line‑item detail; staff agreed to provide itemized lists of the identified $8.9 million in biennial general‑fund reductions.

Next steps: Carlson said the public hearing will remain open for a month (comments accepted through March 18) and the council could adopt ordinance language on March 18. She cautioned the council that the 6% utility tax alone will not permanently fix the structural imbalance but could bridge revenues to a voter‑approved metropolitan park district. No vote was taken at the meeting.

Context: Carlson noted many nearby cities levy utility taxes and some have phased increases; Issaquah and Redmond were cited as having enacted or increased utility taxes recently. The city will bring administrative rule language and a refined draft ordinance back to council before any effective date; staff said rules must be in place by Jan. 1 if the tax is adopted.