After marathon meeting, Edmonds council raises property taxes 1%

Published 4:00 pm Wednesday, October 25, 2023

EDMONDS — The Edmonds City Council voted unanimously to increase property taxes at a 4½-hour public meeting Tuesday night, in an attempt to address a $2.2 million city budget shortfall.

City Council member Vivian Olson motioned to increase property taxes by 1% and to collect “banked capacity” — property taxes the city opted not to collect in the past — from the past five years. The city is allowed to collect these funds at any time, per state law. Effective January, property taxes will increase $35.49 annually for the average home valued at $800,000, according to city estimates.

Washington allows cities to increase property taxes by 1% annually, but Edmonds hasn’t done so in five years. That means the city can collect about $600,000 in banked capacity, city records show.

“I don’t see we have a choice at this point,” council member Dave Tietzel said.

“I would recommend to future councils that they take the 1% each year,” said Olson, who noted that the impact will be felt more this year than in subsequent years.

Financial reports show the 2023 fiscal year will end with record revenues. However, record expenditures have forced the city to draw $2.2 million from reserves, according to the proposed 2024 city budget. As a result, the city’s reserve funds are below the minimum balance required under city policy.

Dave Turley, the city’s administrative services director, said Edmonds has been “more than responsible” with its spending.

“We’re here now because we’re having record inflation. We’re not immune to inflation,” Turley said in a council meeting last week. “It’s not bad management by council and approving bad budgets, it’s not bad administration. Our revenues haven’t gone up because we haven’t taken action to increase our revenues.”

The property tax increase vote occurred as the city tussled with the idea of declaring a fiscal emergency during last week’s special meeting, sparking a debate over whether the move was necessary to address the city’s financial problems.

The disagreement came during the home stretch of a tight mayoral race. In a four-way primary, incumbent Mike Nelson and challenger Mike Rosen were neck-and-neck with roughly 35 percent of the vote.

Nelson opposed declaring an emergency and took the unusual step of emailing a statement to local media, including The Daily Herald, outlining his opposition before a council work session last week.

The mayor called the idea of an emergency declaration a “scare tactic and political stunt.” He said the move would damage the city’s high credit rating and raise interest rates on a utility bond, eventually costing the city more.

Rosen, meanwhile, told The Daily Herald he disagreed with Nelson’s assessment.

“Our finances are in deep trouble. … Even if we play all these tools to sort of help us get through this year, it doesn’t help us through next year.”

In the end, the council approved one resolution combining two proposals, one written by council member Diane Buckshnis — who took 21% in the mayoral primary — and the other by City Attorney Jeff Taraday.

The final resolution eliminated Buckshnis’ call for an emergency declaration and added an amendment requiring the city to establish a task force that will work to replenish the reserve funds.

The council also approved a 1% property tax levy to support emergency medical services, costing the average homeowner an extra $2.40 annually.

Both ordinances are set for final approval at a council meeting Nov. 6.

Election Day is Nov. 7.

Ashley Nash: 425-339-3037; ashley.nash@heraldnet.com; Twitter: @ash_nash00.