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Everett staff propose 12% water‑sewer utility tax to close budget gap; council schedules hearings
Summary
City staff told the Everett City Council on May 13 that replacing a 6% payment‑in‑lieu with a 12% water and sewer utility tax would generate roughly $7–8 million annually and cover about half of a projected $15 million structural general‑fund deficit; council set public hearings and asked staff to return with expanded low‑income assistance options.
City staff on May 13 presented a proposal to the Everett City Council to replace the city’s long‑standing 6% payment‑in‑lieu on utilities with a 12% water and sewer utility tax, a change staff says would generate about $7 million to $8 million annually and address roughly half of a projected $15 million structural deficit in the general fund for 2027.
Mike Bailey, a city finance official, told the council the measure would recharacterize the current payment‑in‑lieu as a business‑oriented utility tax on gross utility revenues. “We anticipate this would generate around, 7 and a half million between 7 and $8,000,000,” Bailey said, adding the move would modernize Everett’s approach and bring it more in line with neighboring cities.
The city expects the tax change to require a midterm adjustment to customer rates. Ryan Sass of Public Works and Utilities said the combined effect of the tax shift and a proposed $1 monthly filtration charge would raise the typical residential bill by about $12 per month starting with an August 2026 implementation. “With the amended rates, the typical residential customer will see a base monthly increase of about $12 per month in 2026,” Sass said.
Sass and Sean Bridge, finance and support services superintendent, outlined why the utility needs the revenue: mandatory projects to meet regulatory orders (including combined sewer overflow controls) and replacement of aging infrastructure such as a century‑old reservoir and an ageing filtration plant. Staff said a $1 filtration addition would allow the city to retire outstanding filtration debt early and avoid larger future increases.
Council members pressed staff on protections for low‑income households and renters. Council Member Erica Weir asked whether assistance programs for low‑income, senior and disabled residents would be expanded; Bailey and Sass said finance staff would return promptly with options. “Our finance staff would be happy to take a look at our current programs and come back next week with additional ideas of what we can do to increase our assistance,” Sass said.
Council members also sought data on historical rate changes and how much of the new revenue would be paid by non‑resident wholesale customers; staff agreed to provide a clearer breakdown and rate history. The council received the presentation as a first reading; a public hearing and second reading were scheduled for May 27, with a final vote set for that date.
If adopted, staff said, the change would be implemented as a water/sewer utility tax on gross revenues and used to bolster the general fund rather than be earmarked to specific utility operations.
