Mountlake Terrace presents fiscal task force recommendations

Published 1:30 am Monday, January 19, 2026

EVERETT — Mountlake Terrace staff presented community task force proposals for bridging the city’s projected budget gap at town halls last week.

The estimated gap through 2030 is an average of $4.2 million per year, city staff said. Through 2035, the average projected gap is $5.4 million. The city’s reserves are projected to drop below the minimum threshold in 2027.

In July, the city established a fiscal sustainability task force to gather community input about strategies to balance the budget and replenish the city’s reserves. Since then, the group of 15 volunteers has been preparing potential budget packages to propose to the council.

The budget gap stems from rising prices for city services combined with a limited ability to raise revenues through taxes, city staff said.

For example, liability insurance has increased by $1.2 million since 2021. To stay within the market rate, salary costs have increased by $2 million since 2024. Other increases include public defense contracts, infrastructure costs and inflation.

Last year, the parent company of Dragon Tiger Casino filed for bankruptcy. The closure of the casino will significantly reduce the amount of gambling tax the city receives, Finance Director Sirke Salminen said. The city’s sales and utility taxes are already some of the highest in the state, she added.

Staff presented two packages at the town halls, a “preferred package” and an “alternate package.” The two packages include many of the same proposals.

The proposal with the largest impact on the city’s general fund is establishing a metropolitan parks district, which would allow the city to collect additional property taxes to put toward parks and recreation. Establishing a parks district requires voter approval. Additional revenue from the district would save the city about $2.15 million, Deputy City Manager Carolyn Hope said. The change would raise property taxes by between $254 to $444 per year for the average homeowner.

The city likely wouldn’t put a metropolitan parks district to the voters until 2030, Hope said.

In the near future, the city will have to replace its recreation pavilion, Hope said, which would cost about $100 million. The task force considered a multi-jurisdiction metropolitan parks district, which would allow taxes from neighboring cities to be used to replace the pavilion. More than 70% of the pavilion’s users are from other cities, Hope said. Ultimately, the task force was in favor of a parks district that only includes Mountlake Terrace to retain control of the city’s facilities.

“The city-only option was the priority, that’s what our revenue projection is based off of, but they’re open to the possibility of partnerships if the pavilion is still located in the city,” Hope said.

The task force was also in favor of a transportation benefit district sales tax. The city can implement a 0.1% tax without voter approval and a 0.3% tax with voter approval. The 0.3% tax would generate $835,000 for the city.

Other proposals included in both packages were reevaluating general fund reimbursements, reducing software subscriptions, eliminating historical savings, reduce expenditures by 5% and raising rates for fleet maintenance services.

Combined, those proposals would add an estimated $4.27 million annually to the general fund, according to the presentation.

The two packages differed in how to come up with an additional $2.4 million in savings.

The “preferred package” included having the city raise property taxes to its full banked capacity of $2.4 million. This would add an estimated $130 per year to the average homeowner’s annual property tax bill.

In the “alternate package,” the council would raise property taxes to 75% of its banked capacity, which is $1.8 million. This would raise property taxes by $97 per year for the average homeowner. The remaining savings would come from eliminating a police commander and increasing vehicle license fees from $20 to $40.

Community members can weigh in on which package they’d prefer through a survey on the city’s website. After gathering input from the community, the task force will present its recommendations to the City Council in February, City Manager Jeff Niten said.

“We’re not just trying to solve the issue today,” Niten said. “We want to solve it longer-term. So we’re not just kicking the can down the road. We’re trying to solve it for a good chunk of time, at least a decade.”

Jenna Peterson: 425-339-3486; jenna.peterson@heraldnet.com; X: @jennarpetersonn.