Council adopts FY2025–26 budget and raises property tax rate 10.57%

On June 26 the City Council adopted Ordinance 1576 to approve the fiscal year 2025–26 municipal budget and later approved Ordinance 1577 to set the property tax rate at 0.5387 per $100 of assessed value, a change the council recorded as a 10.57% increase.

The budget document presented for adoption covers the fiscal year beginning Oct. 1, 2025, and ending Sept. 30, 2026. Staff told the council the proposed budget projects $194,446 more in total property-tax revenue than last year’s budget, described in the hearing as a 13.53% increase; the staff packet also states the revenue expected from new property added to the tax roll this year is $13,018.

At the start of the public hearing a resident, Jed, urged the council to avoid raising taxes and instead look for ways to expand new property and investment on the tax roll. “...let’s look at how we can't monetize a lower tax by getting new people added to the tax roll,” Jed said during public comment.

During council discussion staff and councilors repeatedly raised concerns about water-rate decisions that remain unresolved. Staff warned that the budget assumptions currently rely on a particular water-rate scenario; if the council delays a water-rate decision the city’s revenue projections could be off by hundreds of thousands of dollars, with staff characterizing the shortfall as “around $900,000” under one scenario. Staff said the budget currently presented does not include a water-rate change and that a separate item on rates would come later.

The budget ordinance (No. 1576) passed on a 4–1 vote. The motion to adopt the tax ordinance (No. 1577), setting the rate at 0.5387 per $100 of assessed value, also passed 4–1; Council Member Larry voted no while members Chuck, Karen, Les and Kelly recorded yes votes.

The adopted budget includes a contingency line intended to cover staffing vacancies or contractor mowing and earmarks $150,000 from reserves for litigation and match for a CDG (community development grant) match, according to the staff presentation. Staff said any separate change to the residential collection-station rate would be brought back to council in October.

The council set the tax rate and adopted the budget during the same meeting after the required public hearings. Implementation of any water-rate changes, and related loan repayments or contract payments discussed by staff, remains a future decision the council must make to ensure projected revenues materialize.