MUKILTEO — In a tense City Council meeting Monday, Mayor Joe Marine proposed a biennial budget that would leave little in general fund reserves by the end of 2026.
Mukilteo’s general fund is operating with an $810,000 deficit this year. Under Marine’s proposed budget, that deficit is expected to swell to nearly $2.7 million by 2026, leaving just over $2.5 million in the city’s general fund reserves.
City policy suggests maintaining a rainy day fund equal to two months of operating expenses, equivalent to 16.7% of the general fund. The city would be just over $900,000 short of that goal in 2026 if the proposed budget was adopted, with 12.2% of the general fund remaining.
Mukilteo is expected to annex the east side of the Mukilteo Speedway by early 2025, bringing in an additional $500,000 per year, the mayor said in an email Wednesday. The sale of Hawthorne Hall is worth another $500,000. This revenue will bring the general fund balance back above the 16.7% mark by 2026, Marine said.
To save money, Mukilteo would use $1.9 million of American Rescue Plan Act, or ARPA, funding in 2025 to pay for existing emergency medical services personnel, exhausting the remainder of the one-time funds, the mayor said in his budget address Monday.
The city would also halt funding for equipment replacement for two years while delaying the construction of South Mukilteo Park. Police, fire and EMS services would be fully funded, in addition to the city’s Police Facility Wellness Center project, stormwater system inspections and repairs, as well as speed cushion replacements on city roads.
The mayor called the budget “lean by necessity.”
Some City Council members raised concerns about the preliminary budget at Monday’s meeting, particularly with the ending fund balance in 2026 and the use of ARPA dollars on EMS.
“How on earth, in an environment where property taxes are capped at a 1% increase, sales taxes are projected to increase at 2%, we’re nearly 100% built out, are you going to hand off a structural deficit to somebody in 2027 with no ability to increase revenue?” council member Mike Dixon said. “You’ve used up all of the money we have, you used up all the ARPA fund, you used up all the operating reserves, and then hand off a $2.5 million deficit. That’s a massive problem.”
In August, Mukilteo went to voters to raise the city’s EMS levy from $0.26 per $1,000 of assessed property value to $0.50. The city said the levy would have paid for six additional firefighters and paramedics, as well as advanced medical training, ambulances, equipment and medical supplies. Voters decided against the levy with a thin margin of just under 4%.
Expenditures for the city’s EMS are projected to increase by nearly $400,000 by 2025. To cover the rising costs, $1.9 million in ARPA funds would be directly transferred to EMS in 2025. In 2026, that $1.9 million would go to EMS services via the general fund, leading to an increased general fund deficit that year.
Multiple council members said the levy should have been more clear about what it would fund.
“We misled the voters, we did,” council member Steve Schmalz said. “We misled them, because we said we were going to hire six new, seven new employees, new equipment, training. All of that was never going to happen, because we needed the money to fund the existing EMS services. So when you tell the voters you’re going to fund something new, that misleads them. If you came back and you told us, ‘Hey, we’re projecting a $2 million deficit in the general fund and we need the money from the EMS [levy] to pass to help fund that,’ I think that would have been a different story. I think folks would have passed that.”
Council member Donna Vago and Marine said the levy would have been necessary even without hiring new staff, because of an unprecedented rise in costs. If Mukilteo decides to keep the city’s fire and EMS services, rather than joining the regional South County Fire, the mayor said, officials will likely need to present another levy to voters.
“Any further comments, or questions, or accusations, or whatever you guys want to talk about?” Marine said to close discussion on the budget at Monday’s meeting.
Council President Louis Harris thanked the mayor and staff for preparing the budget, stressing it was still preliminary, with council having the final say over the biennium spending.
“Ever since I’ve been on council, it’s been clear that there was going to be a point in the future in which revenue and expenses weren’t going to align, and we’d have to make some serious decisions,” Harris said in the meeting.
A public hearing on the budget will continue in the council’s next regular meeting at 6 p.m. Monday.
Will Geschke: 425-339-3443; william.geschke@heraldnet.com; X: @willgeschke.
Talk to us
> Give us your news tips.
> Send us a letter to the editor.
> More Herald contact information.
