Chaz Webster, Oak Harbor finance manager, recommended the City adopt the statutory 1% levy increase for fiscal year 2026 during a public hearing on Nov. 5. Webster explained that Washington law (cited in the presentation as RCW 8,455) restricts regular municipal levy increases to 1% annually unless a substantial-need ordinance is adopted, and that the state’s implicit price deflator (IPD) was reported at 2.44%, allowing the city to take the standard 1% increase without an extraordinary finding.

Webster said the 1% levy increase for 2026 would generate roughly $76,736 in additional property tax revenue. He also explained that the city’s total proposed levy increase of $126,128 reflects two components: new construction and property corrections (about $49,000) plus the 1% statutory increase (about $76,736). Webster noted the impact on an average homeowner: on a $400,000 home, the city’s 1% levy increase equates to about $10 per year on the city portion of the tax bill.

Clerk reports confirmed no public comments were received on the levy. Councilmembers asked staff to explain how assessed value changes affect individual property bills and discussed the long-term compounding effect of skipping the 1% step in a given year. David Goldman, deputy city administrator and finance director, explained that the levy rate and assessed values interact: if total assessed valuation increases, the rate per $1,000 tends to decrease so total collections remain within the state cap; an individual property’s tax bill depends on how that property’s assessed value changed relative to the taxing district average.

Mayor Pro Tem moved to adopt Ordinance 2029 authorizing the 1% levy increase; Councilmember Romero seconded. The motion passed 4–3.