Mountlake Terrace is reassessing its financial outlook after experiencing shortfalls in sales and development tax revenues, prompting city officials to closely monitor broader national economic trends. During an August 21 council meeting, city staff presented the 2024 year-end financial report, highlighting variances between projected and actual income across multiple departments.
Sales tax collections fell $377,197 below the budgeted $4.42 million, while development service fees generated $2.17 million against a target of over $2.6 million. City Manager Jeff Niten attributed the decline in development revenue to project cancellations, which also impacted sales tax receipts since construction materials are taxed upon delivery.
Artus Nemati, the city’s newly appointed senior accountant, clarified that revenue variances can occur based on timing—funds are only recorded upon receipt—and underspending by departments can create positive budget variances. However, the drop in key revenue streams remains a concern for council members.
Another financial challenge looms with the closure of the Dragon Tiger Casino, operated by Maverick Gaming. The shutdown, resulting from new state-mandated surveillance requirements, is expected to significantly reduce gambling tax income in 2025. Although 2024 saw gambling tax revenue exceed projections—earning over $1.3 million against a $1.1 million budget—the upcoming loss is anticipated to create a notable gap.
Councilmember Rick Ryan noted that the lawmakers behind the surveillance legislation are based in the Yakima region and may lack familiarity with Mountlake Terrace’s local economy. He emphasized the need for clearer communication between state policymakers and municipalities affected by such regulations.
The public hearing on the annexation of a property at 224229 48th Ave. W. was rescheduled to September 4 due to a typo in the official notice. The next council meeting, a work/study session, will be held on August 28 at Mountlake Terrace City Hall, with remote participation options available via Zoom and telephone.
— news from MLTnews.com
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Dip in development and sales tax revenue has city watching ‘national economic trends’
Key takeaways: n nA decline in sales and development tax revenue prompts city staff to monitor economic trends. n nCity gambling tax revenue will take a hit from the closure of Dragon Tiger Casino. n nThe public hearing to annex 224229 48th Ave. W. was rescheduled to Sept. 4 due to a typo. n nThe Mountlake Terrace City Council reviewed the 2024 year-end financial report during its Aug. 21 meeting, with explanations for revenue and expenditure variances by department. n nThe city’s new senior accountant, Artus Nemati, and City Manager Jeff Niten went into detail and answered questions on the revenues and expenditures by department and source. Nemati explained nuances. For example, when the city’s revenue is received, it can create a negative variance because it is not counted until it’s received, and when departments don’t spend all the funds budgeted, it can create a positive variance. n nHowever, it was the decline in sales and development tax revenue that caught the eyes of Councilmember Erin Murray and Mayor Pro Tem Bryan Wahl. n nSales tax was budgeted for a little over $4.42 million, but fell short by $377,197. n nDevelopment services fees, budgeted for slightly more than $2.6 million, generated $2,166,516. n nNiten explained that development service fee revenue declined due to the cancellation of some projects. In turn, part of the sales tax drop comes from the projects that didn’t go through “because all of the end-use materials that are delivered here are taxed here.” n nHe said that he doesn’t believe there will be as large a gap in 2025. n n“We are monitoring that because of all the national economic trends,” Niten said. “Nobody really knows what’s going to happen.” n nOther notable variances were found in capital improvement revenues. Nemati said the variances came from reimbursement programs for projects that did not get the initial funding to do the work. None of the over $6.2 million budgeted from indirect federal grants was received. n nCouncilmember Rick Ryan said that in 2025, gambling tax revenue will decrease due to the closure of Maverick Gaming’s Dragon Tiger Casino earlier this year, which according to the company was a result of the state’s newly passed central surveillance laws. The gaming company said it found it economically unfeasible to comply with the new regulations. n nIn 2024, gambling tax revenue was budgeted at more than $1.1 million but brought in more than $1.3 million. n nRyan said that both of the people who worked on the state surveillance law bill are based in the Yakima area and aren’t familiar with Mountlake Terrace. n n“So, we might need someone to explain to us what’s going on in the state because this is cutting down our revenue as our city is trying to increase revenue,” Ryan said. “Now it’s going down and nobody really knows why.” n nNiten said that the closure of the Dragon Tiger will take “a significant chunk” from the city’s revenue. n nTo watch the presentation in its entirety, click here. n nThe presentation material can be seen here. n nThe public hearing to annex 224229 48th Ave. W. was rescheduled to the Sept. 4 council meeting. City Manager Niten said the property address in the public notice sent to residents had a typo. n nThe next city council meeting is a work/study session starting at 7 p.m., Aug. 28, at Mountlake Terrace City Hall, 23204 58th Ave. W., Mountlake Terrace. To attend the meeting online, visit zoom.us/join and enter meeting ID 810 1113 9518; no passcode is needed. n nTo make a public comment remotely, complete the registration form within 24 hours of the meeting’s start. n nTo listen via telephone, call 1-253-215-8782 and enter the same meeting ID. n nYou can also view livestreamed meetings and past video recordings at www.youtube.com/cityofmlt.