Mill Creek’s City Council voted 5–2 on Nov. 4 to adopt a 2026 property‑tax levy that raises the city’s levy amount by about $223,000, a 5% increase compared with the prior year.

Finance Director Irmina Ujoty Lumbad summarized the options the city had modeled: a baseline 1% levy increase and several augmented scenarios that combined property‑tax changes with other revenue levers (citywide fee increases, a utility tax and a transportation benefit district), along with possible expenditure cuts. Lumbad told the council staff had modeled scenarios that showed short‑term deficits under minimal action and steadier long‑term reserves under combinations of modest property‑tax increases plus other revenue measures.

City Manager Martin Yamamoto framed the choice as part of a broader fiscal plan tied to council priorities, including financial viability, and said staff would continue to pursue a mixture of approaches — annexation studies, economic development, fee adjustments and new revenue options — to reduce reliance on one source.

What the council decided: After extended debate about reserve levels, services and alternative cuts, the council adopted an ordinance that increases the 2026 levy amount by 5% over the 2025 levy amount (a dollar increase staff calculated at roughly $223,000). The motion carried by a 5–2 recorded disposition; the minutes do not list individual roll‑call votes by name but record the final tally and that the measure passed.

Votes and related direction at the meeting:
- Property‑tax levy (2026): motion to adopt a levy increase that yields an additional $223,000 (5% increase). Outcome: approved, 5–2. Notes: staff will certify the adopted levy to Snohomish County for tax‑billing processing.
- Transportation Benefit District (TBD): council voted unanimously (7–0) to direct staff to prepare an ordinance and notice a public hearing for a $20 per‑vehicle TBD; staff will bring language and a public‑hearing schedule for council consideration.
- Utility tax direction: after discussion of modeled 3% and 6% utility‑tax scenarios, council directed staff (6–1) to return with a utility‑tax ordinance and additional modeling for council consideration; staff noted implementation timing and the need to coordinate with utilities would affect first‑year receipts.

Why it matters: Staff told the council the city faces a near‑term revenue shortfall driven by declining one‑time ARPA support, flat sales tax projections and rising operating costs (insurance, mandated legal/defense costs and state compliance on infrastructure). The levy action preserves near‑term service levels and increases the city’s fiscal flexibility while also prompting staff to prepare implementation plans for a TBD and utility tax to bolster longer‑term revenue. Council members were divided about how much to rely on property taxes versus new taxes and expenditure reductions; several members said they preferred combining modest tax changes with other revenue options rather than a larger immediate property‑tax hike.

Public comment: During the hearing a small number of residents urged the council to avoid large reserve growth funded by new taxes and to balance revenue increases with service needs. One resident said she could “not support $1,500,000 in cuts” and urged measured revenue increases rather than deep expenditure reductions.

Next steps: Staff will certify the levy to Snohomish County, prepare an ordinance and public‑hearing timeline for a $20 TBD, and return with modeled utility‑tax ordinance language for council consideration and a schedule for public outreach and hearing. The council indicated it will revisit combinations of options in December and early 2026 as staff refines timing and implementation details.