MARYSVILLE – The City Council adopted a “very lean” $108.5 million budget for 2005 on Monday that includes no tax increases, no new positions and no job cuts.

The 2005 budget maintains a $24.7 million reserve fund. Most of that is for capital projects bonds, but also includes a $2.6 million reserve for unforeseen problems.

In each of the last two years, the council “banked” the maximum 1 percent property tax raise allowed under state law. This year, the council chose not to exercise that option, despite a city staff recommendation to do so.

With 2 percent already banked, a future council could still decide to collect it, but most of the council members didn’t want to increase it.

“I have to be true to why I ran for City Council,” Councilman Jeff Vaughan said.

The council said it is committed to holding the line as much as possible on taxes, though it had to increase water and sewer utility taxes by 11.6 percent for city residents and 30 percent for those outside the city. While the council struggled with that decision, it had to pay for $26 million in necessary capital projects, city officials said.

Councils in the past have raised property taxes by 2 percent to 3 percent, Councilman Jeff Seibert said.

“We’ve held the line,” he said.

“We made the right decision on the utility taxes,” Vaughan said. “But I think we have an opportunity to show that we care about this money that’s not our money, and that we don’t take it just because we can.”

The city lost 10 staff positions in 2002, seven through layoffs and three through attrition. It added six new positions this year without increasing taxes, and has focused its efforts on economic development in the hope of bringing in new revenue.

The 2005 budget includes $60,000 for economic development council members hope will offset stagnant but improving sales tax growth and limited property tax growth, as well as the effects of voter initiatives and the need for traffic and road improvements, finance director Sandy Langdon said.

Beginning in 2005, Snohomish County will re-evaluate properties annually instead of every four years so tax revenue increases will be smaller each year, Langdon said.

Of the city’s preliminary expense budget, 39 percent is for capital projects, including completion of the waterfront park. Salaries and benefits account for 20 percent of that budget.

The budget includes one proposed fee increase, a $10 boost in business licenses, which currently are $50 a year for initial licenses and $40 for renewals. Before the increase occurs, however, the council plans a workshop to review its business license fee structure.

Reporter Cathy Logg: 425-339-3437 or logg@heraldnet.com.