City weighs annexation and levy options as Central Skagit Library plans potential lid lift

City staff and the Central Skagit Library director briefed the Sedro‑Woolley council about options after the library signaled a possible levy lid lift to address district deficits.

Kelly (city staff) explained that the Central Skagit Library District was formed as a rural district that initially excluded municipalities, so Sedro‑Woolley residents currently do not pay a library levy directly. Instead, the city pays the district under an interlocal agreement; in 2025 the calculation resulted in a payment of roughly $474,000 before subtracting the city’s library debt service ($121,000 net to the library).

Dan Owens, the library director, said the district is one of the lowest‑rate library districts in the state and that trustees have discussed a levy lid lift as reserves decline. Staff presented five options for the council to consider: annex into the district in time for a 2027 annexation vote (so residents would directly pay a library line on future property tax bills), annex while reducing the city's own levy to offset the new library levy, allow a lid lift first and annex later (risking a year of high city payments), or do nothing and continue the interlocal agreement (which could force the city to absorb significantly higher payments if the district raises the levy).

Staff modeled impacts and estimated that a typical home (example value $419,000) could see roughly $128 in additional library property tax if residents were annexed into the district in 2027. If the district pursues a large levy lid lift and the city does not annex, Kelly warned the city could face a more than doubling of its payment to the library under the current interlocal formula.

Council members asked about the bond and debt service (Dan Owens said the library bond runs through 2039), the mechanics of annexation (annexation requires a city vote that would be by Sedro‑Woolley residents only), and negotiation levers. Staff said annexation and a new interlocal could be structured so the library assumes or the district collects library tax directly after annexation; debt allocation and detailed terms would be part of negotiations.

Next steps: staff recommended further legal review, outreach and direction from council about which option to pursue before the August ballot deadline for November measures; staff said it could provide more detailed cost modeling and a public information plan if council wants to put annexation or levy items on a future ballot.