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Council reviews special funds and discusses revenue-neutral rate amid large projects
Summary
Staff reviewed special-purpose funds and recommended notifying the county that the city may exceed the statutory revenue-neutral calculation while keeping typical residential bills flat; council discussed mill-levy targets and multi-year fund projections for water, sewer and parks.
Staff reviewed the city's special-purpose funds (refuse, special highway, parks, transient guest tax, water and sewer maintenance, technology and aquatic center funds) and five-year projections. The presentation noted recent county valuation data and explained revenue-neutral-rate mechanics: because large new property (Panasonic) raises assessed valuation, the city must lower its mill levy to avoid collecting more from existing taxpayers. Staff recommended notifying the county that the city intends to exceed the formal revenue-neutral calculation so council retains flexibility while targeting a mill levy intended to hold the average residential tax bill roughly flat (staff cited an illustrative average 2026 residential bill of about $534 and proposed a target mill levy of about 12.17 to keep household bills comparable to last year).
Council discussed the timing and public hearing requirements for revenue-neutral-rate action; staff noted that exceeding the RNR triggers an additional public hearing during budget adoption. Council also reviewed allocations for the transient guest tax and the water and sewer maintenance funds and emphasized continued use of developer-funded infrastructure rather than general-fund borrowing where possible.
