Mayor proposes mid‑biennial budget adjustments to cover nondiscretionary costs, recommends REET transfer and delays to some projects

Monroe City administrators brought the mayor’s recommended mid‑biennial budget adjustment to the City Council at a study session on Oct. 21, outlining steps to balance 2026 budgets, fund nondiscretionary obligations and preserve the city’s reserve target.

What the mayor proposed: City staff reported that the city’s actual beginning fund balance for the General Fund was about $1.9 million lower than previously projected and that nondiscretionary expenditures are running roughly $1.4 million over budget. To meet the city’s reserve policy target (17% of operating expenditures), cover non‑discretionary overages and maintain current staffing, the mayor recommended a package of adjustments that includes using contingency funds, a one‑time transfer of real estate excise tax (REET) revenue to the General Fund, reductions or postponements of several professional service contracts and delays to selected capital or nonessential projects.

Key figures and mechanics: Staff said the reserve policy target equates to about $3.2 million under the revised calculations. The mayor’s recommendation relies on these elements to close the gap: - Use of contingency and other adjustments totaling roughly $1.67 million to help meet reserve targets while leaving a contingency balance (staff estimated about $348,000 would remain in contingency after recommendations). - A proposed transfer of about $490,000 of REET proceeds to the General Fund to support parks operations and other purposes allowed by new legislation. - Reductions in discretionary travel, training and supplies and cuts to $603,000 in professional services (economic development, communications, state/federal lobbying and non‑grant human‑services contracts). - A recommendation to reduce the General Fund transfer to the fleet fund by about $345,000, which would delay certain vehicle replacements (primarily in parks and police) rather than eliminate positions. - Recognition of new grant revenue for police and court programs (about $209,000) and a salary/benefit adjustment of roughly $394,000 to account for existing approved positions through 2025. - To align with increased wholesale water costs from Everett (8.37% in 2025 and 6.59% in 2026), staff proposed an 11% water rate increase in 2026 to cover an estimated $2.85 million variance in the water operating fund.

What the recommendations do not do: The mayor’s proposal preserves current staffing levels and keeps several council‑approved vacancies open only through year‑end (Dec. 31, 2025) to avoid layoffs. It does not authorize cuts to full‑time staff positions as part of this mid‑biennial adjustment; council members expressed a preference to avoid staff reductions. The plan would, however, delay some projects (campus study, campus monument sign, North Hill Park design and certain park signage and security camera purchases) and reduce some contracted services.

Alternative revenue and cost options discussed: Staff listed additional options council could consider to restore funds or increase revenue, including a 2% franchise fee on the city’s solid‑waste contract (estimated at $68,000), further reductions to FTEs (each FTE ≈ $160,000 fully loaded), permit‑fee updates, adjustments to interfund rates, evaluating traffic‑safety cameras (uncertain net revenue after startup costs) and voter‑approved park levies in 2027 (estimated $500,000–$1,000,000). Staff also noted recently passed House Bill 2015 would allow a local 0.1% sales tax option for public safety but that related rules and implementation details remain under development and could impose additional administrative requirements on police.

Council reaction and next steps: Council members thanked staff for the work and generally endorsed preserving staffing levels. Several members said they opposed pursuing a solid‑waste franchise fee that would pass costs to residents. Council members asked staff to explore whether fleet reductions could be targeted to non‑police vehicles and to return with more analysis on jail alternatives and court recommendations tied to the municipal court assessment.

The timeline: Staff will return on Oct. 28 with additional information and will hold the first public hearing on the budget adjustment on that date. Council will hold a second public hearing Nov. 18 and aim to adopt the mid‑biennial budget adjustment on Dec. 2. The property‑tax levy resolution must also be adopted by Nov. 26 as part of statutory deadlines.

Votes at the meeting: Council voted on an unrelated procedural motion to accept terms of Republic Services’ response letter regarding summer missed collection complaints. Council member Starborough moved and Council member Fulcher seconded a motion to accept the terms; the council approved the motion 5–0. (Council members Beaumont and Gamble were recorded as absent and excused.)

Ending: City staff said the mayor’s mid‑biennial recommendation balances competing priorities—preserving staffing, meeting policy reserves and reducing discretionary spending—and will be refined through the public‑hearing process and follow‑up analyses before council adoption.