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# Port Townsend City Council Reviews 2027 Budget Gap, Approves Tax Levy
- URL: https://www.jeffcobeacon.com/port-townsend-city-council-reviews-2027-budget-gap-approves-tax-levy/
- Published: 2026-10-20T23:21:17.000Z
- Updated: 2026-10-20T23:21:17.000Z
- Description: Winter Warming Center lease and resolution to protect local children also approved
- Author: Rachael Nutting
- Tags: Local News, City Budget, Taxes

PORT TOWNSEND, WA — City Council met Monday, October 19, 2026, for a nearly five-hour-long business meeting that included budget deliberations, a property tax levy approval and several presentations. Reporter Scott France covered the water-related agenda items in a [separate article](https://www.jeffcobeacon.com/port-townsend-council-takes-up-water-rates-and-pipeline-costs/).

**Property tax levy approved**

The council held a public hearing and approved [Ordinance 3372](https://cityofpt.granicus.com/MetaViewer.php?view%5Fid=4&clip%5Fid=3941&meta%5Fid=262035&ref=jeffcobeacon.com), fixing 2027 property tax levies: a 1% general levy increase and a $150,000 voter-approved levy for Mountain View Commons capital improvements. Finance Director Jodi Adams explained the city receives about 15% of local property tax revenue, with the rest going to schools, the county, fire, EMS and hospitals. The 1% increase amounts to roughly $6.82 more per year for a $300,000 home and adds about $45,000 to city coffers — higher than typical due to new construction. 

**2027 budget hearing**

The bulk of the evening focused on the [2027 preliminary budget](https://cityofpt.granicus.com/MetaViewer.php?view%5Fid=4&clip%5Fid=3941&meta%5Fid=262044&ref=jeffcobeacon.com). Since the October 5 presentation, staff reduced the recurring gap from $2.1 million to $1.91 million through updated revenue projections and departmental reductions. City Manager Steve King framed the challenge as a structural one: with inflation at 3.9% but the city limited to 1% annual levy growth, recurring costs consistently outpace revenue. “The fundamental challenge of government budgeting” is balancing mandated services, community priorities and limited resources, he said.

Staff presented a series of recommendations, including removing Mountain View facilities replacement from the facilities replacement model — saving roughly $1 million annually — and funding other buildings at 10%. The proposal also recommends fully funding fleet and IT replacement, adding an assistant city attorney offset by cuts to outside legal counsel and phasing in a salary study adjustment for non-represented staff. Departmental reductions across nine departments, unfunded requests and internal billing changes would close an additional $659,000.

Council members largely supported the staff direction. Council member Fred Obee favored the 60-day operating reserve plus a $500,000 emergency fund, suggesting deferrals like the shared motor pool car and dog park expansion to reach the target. Council member Neil Nelson strongly backed exploring AI-assisted permitting, citing frustration from residents and contractors. “People are frustrated beyond belief,” he said. “We need to change that.” He also supported adding in-house legal counsel. Council member David Faber warned that defunding the Mountain View replacement signals the pool’s days may be numbered, calling it a “crying shame.”

Deputy Mayor Owen Rowe thanked staff for the difficult work, endorsed investing in staff capacity and economic development and urged caution on setting aside $300,000 for 2028\. “Staff capacity is one of the wisest decisions we could make,” he said.

Public comment included Judy Krebs questioning utility fund transfers to capital projects and the transparency of cost allocation, Mary McCurdy asking about comprehensive plan remand costs and Bruce Cowen thanking staff for the budget presentation. Residents also raised concerns about the paper mill's environmental impact, water storage study costs and whether water rates reflect the true cost of service.

City Manager King responded by presenting the [Oct. 5 presentation](https://cityofpt.granicus.com/MetaViewer.php?view%5Fid=4&clip%5Fid=3929&meta%5Fid=261676&ref=jeffcobeacon.com), which included an extensive spreadsheet of capital projects the fund allocations would support. He explained that the water storage study is funded through the Olympic Gravity Water System fund, with the mill providing 90% of revenue. He clarified that remand costs total $300,000 for planning and $150,000 for legal fees. 

Staff will return with a balanced budget November 2, with a second public hearing November 16.

**Other business**

The meeting opened with a proclamation designating October 18–24 as Friends of Libraries Week. Officer Daniel Tourette was sworn in as sergeant after serving as acting sergeant for about six months. Patty Schmucker and Kayle presented a long-term vision for Rotary Park, a city-owned sliver of land near the ferry terminal and U.S. Bank. 

The council also approved a winter warming shelter lease with the Jefferson County Interfaith Action Coalition (November 9, 2026–April 18, 2027, with waived rental fees) and Resolution 26-022 opposing state anti-trans initiatives, which everyone in the chambers widely supported. Council also approved drafting two letters: one concerning Growler operations to the Navy, and the other concerning contamination investigations of the Port Townsend Paper Company.