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Finance team reports mixed third-quarter results; council set to hold public hearing on budget amendment Nov. 20

Mountlake Terrace City Council · November 14, 2025

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Summary

Finance staff reported third-quarter variances including property-tax timing, lower gambling and development-service receipts, and several capital transfers; a mid-biennial budget amendment that reorganizes funds and moves projects into 2026 will go to public hearing Nov. 20 with a council vote to follow.

Finance staff presented the city’s third-quarter financial report and a mid-biennial budget amendment that reorganizes funds, adjusts beginning balances, and moves many capital projects into 2026.

Finance Director Sergei Salomon and Financial Technician Caitlin Rinke told council that property-tax receipts are at about 54% of budget (large collections come in May and November) and that gambling-tax receipts remain below forecasts because a local casino filed bankruptcy; some trickle collections have since resumed. Development-service fees (permits and related CED receipts) were at roughly 49% of budget and staff attributed underperformance largely to broader financing uncertainty that has delayed some developer projects. The recreation fund’s aquatics revenue was below forecast because of pool closures for maintenance.

Staff highlighted that several transfers and capital outlays (including ARPA-funded work) have not yet been entered and will be recorded in the fourth quarter. To improve transparency, the proposed budget amendment separates operating funds from construction/capital funds, creates new funds (an opioid-settlement fund, an art fund, a tree fund and dedicated debt-service funds) and moves some capital projects to 2026. Staff also noted expected grant revenues (including a previously discussed RCO award and potential state/federal grants for the library) and asked council to hold a required public hearing on the amendment on Nov. 20 prior to a vote.

Council asked clarifying questions about the persistence of lower development fees and the likely shortfall risk for 2026; staff said the next quarter and the early part of 2026 will show whether lower receipts are a timing issue or a sustained trend and indicated they will adjust as needed. Council thanked the finance team for the transparent slide presentation and asked for monthly or committee-level reports with the same format going forward.

Separately, staff summarized property-tax levy options for 2026: the city may increase the levy by the implicit price deflator (IPD) or 1 percent, whichever is lower (this year 1% is lower). Adopting the full 1% increase would raise about $33,235 and average roughly $2.84 per household. The public hearing and levy vote are scheduled for Nov. 20.