- Utilities 101
The City's Budget & How Your Utilities Are Funded
The majority of cities’ operating revenue comes from property tax, sales tax, business and utility taxes. All of these taxes go into the city’s General Fund, which pays for essential services.
State laws can set limits on taxes including property taxes, which are capped at a 1% increase each year. This means that although property tax is the city’s largest revenue source, it does not keep pace with inflation or population growth. Only about one-fifth of your total property tax bill goes to the city. The majority is routed to the state’s school fund, Edmonds School District, Snohomish County, Sno-Isle Libraries, Public Hospital District #2, and Sound Transit.
Within the city's allotment, nearly two-thirds of the revenue pays for public safety including police, fire, jail costs and emergency medical services. The remaining one-third pays for streets, sidewalks, parks and other essential services.
Utility systems like water and sewer are financially separate from property taxes. That means utility billing revenue can only be used to fund utility services.
The city conducts periodic utility rate surveys to determine the need for cost increases in providing water, sewer and stormwater service. Rate studies generate a pricing structure and financial plan to satisfy the long-term obligations of the utilities. These include providing the utility service, maintaining the infrastructure, and replacing pipes and systems. It also addresses legal and regulatory requirements.
During the Great Recession in 2007-2009, the city did not fully administer the recommended utility rates and so rate increases are necessary to catch up with costs and planned maintenance and replacement of our aging system. The city’s utilities were installed mostly in the 1960s and 70s and those pipes are now failing.
Maintenance and upgrades prevent catastrophic failures that are even more expensive for the city and, in turn, the community.
Keep an eye on City Council proceedings and city communication channels to stay informed on utility rate setting processes.
For Utility Billing Questions, Contact:
Utility Billing Department