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Council approves mid‑biennial budget adjustments, property tax levies and building acquisition financing
Summary
Council accepted Q3 financials showing modest revenue gains, approved mid‑biennial adjustments tied to a recent building purchase (9655 SE 36th St.), and adopted property tax levy ordinances and a NORCOM dispatch allocation for 2026.
The Mercer Island City Council on Nov. 18 adopted a set of mid‑biennial budget adjustments and related ordinances after a finance presentation that showed general‑fund revenues at about 72% of budget through Q3 and net revenues roughly $300,000 above the prior year.
Finance Director Matt Morning told the council that sales‑tax and business‑and‑occupation receipts have improved, and parks and recreation rental revenue is up roughly $400,000 through Q3. He also noted that general‑fund expenditures are higher than last year largely because of one‑time items: a $3.3 million set‑aside and subsequent acquisition of a building (9655 SE 36th Street), and a tranche of payments to settle time‑accrual liability related to the Eastside Fire transition.
To cover acquisition and related costs, staff sold $1.5 million in limited‑tax general obligation bonds and proposed several adjustments totaling about $450,000 across funds: debt service on the bonds, $30,000 for real‑estate closing services, and a $50,000 appropriation for minimal utilities/maintenance of the new building (to be funded by building lease revenues). The council also approved a $200,000 appropriation for work tied to Growth Management Act (GMA) compliance and long‑range planning.
On property taxes, staff presented ordinances to set the 2026 regular levy and a levy lid lift for the 2022 parks levy; the total increase between the two levies was described as approximately $320,000. The council adopted the budget amendment ordinance and the property tax ordinances by roll call. The council also adopted a resolution approving the city’s 2026 NORCOM emergency dispatch contribution (just over $706,000), which staff said had already been built into the budget.
What’s next: Staff will implement the approved budget adjustments and return to council with a more detailed plan for phasing renovations and long‑term operating costs for the newly acquired building.
