- We also discussed the timeline of acitvities related to a sales tax measure, and the renewal of the LMD. The discussion focused on what role the Council has, what role staff has, and when various activities will take place. This included how and when ballot language would be drafted, when staff would hold informational town halls to inform about each measure, and the timing of each. The Council gave its preference that staff hold two informational townhalls - one each before and after ballots were mailed to residents.
There was a question posed by a resident which I wanted to address. The gist of the question was, given the City has a healthy reserve, why is it appropriate to seek a tax increase rather than spend down reserves?
At first glance, it may not make sense to hear that the City needs more tax revenue when it is maintaining a large reserve. After all, reserves are like savings. But savings alone do not keep a a household or a City financially healthy if ongoing operations exceed revenue.
Reserve spending may be appropriate in some circustnaces. Things like emergency response, smoothing during short term economic downturns, one time investments for major equipment, or even costs to cover efforts during reorganization may be appropriate. These are all one time in nature and time bound.
A city’s reserve works like a rainy-day fund. It exists to help during emergencies, economic downturns, or unexpected events where a large expenditure may be required. Reserves are not designed to pay for routine, ongoing costs such as wages or maintenance. Reserves are a fixed pool of money. Operating deficits repeat every year. If we spend reserves on routine services, it is choosing to spend down a limited asset to cover an unlimited problem. That math never works. It only postpones the moment when the money runs out.
At our December 2, 2025 meeting, staff presented a projection of the general fund if no new revenues were implemented:
And the gap will likely grow. City revenue is largely based on property taxes. Because the increase in property taxes is capped, inflation has been outpacing proprty taxes for several years. This means that while our operational costs rise, our revenues are not able to rise at the same rate. With a sales tax that puts us inline with neighboring cities, the projection looks quite a bit different:
There is also a fairness issue. Using yesterday’s savings to pay today’s bills pushes the cost of current services onto future residents. Rather than address the underlying cause of operational deficits, using reserves asks future generationsn to solve and pay for the the services that are being consumed today. We as a Council are elected to make decisions and address issues that impact the City. We know this is an issue, and it should be addressed.
Increasing tax revenue addresses the core problem. It brings ongoing revenue in line with ongoing costs. That balance protects essential services, preserves reserves for true emergencies, and helps ensure the city remains stable and resilient over the long term. In short, savings provide security, and in some cases can buy some time. But only stable revenue buys sustainability.and keeps the City running.
