The city of Sequim’s proposed $58 million budget next year is its largest ever, including its most ambitious capital project plan in the city’s 110-plus years of existence.

For residents, city staff report they can anticipate more home construction and city-led projects in 2025, along with a proposal to continue a 3% sewer/water increase to utilities that would cost the average household a few more dollars a month depending on usage.

These proposals and more will be discussed by councilors and staff this month, leading to public hearings on Nov. 11 for proposed rates and fees and a 1% property tax levy increase, and on Nov. 25 for the city’s budget approval.

City Manager Matt Huish wrote that the city’s budget is large because of $24.6 million in capital improvements that were either delayed or impacted by Covid-19 restrictions and/or supply chain issues.

One of the significant projects includes the start of the West Sequim Bay Corridor Project to bring utilities for the first time to the road and build a lift station on Forrest Road.

Sue Hagener, administrative services director, said in a video presentation on the budget that 71% of the $13.4 million general fund is made up of salaries and benefits, with the increase in expenses partly due to new union contracts for police staff, and cost of living increases for non-represented staff.

The budget is balanced and in the black by about $56,000, she said.

Sequim’s reserves will be at about $3.5 million — slightly below policy maximum, Hagener reported — or about three months of operating expenses.

Huish wrote in the proposed budget handbook that the “budget reflects a range of economic forecasts that predict slower but continued positive scale activity, driven by moderate growth and a stable retail environment.”

“These forecasts are reflected in our conservative revenue estimates, which are designed to ensure adequate reserves, provide for timely debt payments and cover contingencies in our General Fund,” Huish noted.

“Operational expenses show modest increases from prior years, influenced by inflationary pressures, market and cost-of-living adjustments for employees, and ongoing maintenance and preventive measures.”

City staff estimate that development activity will go up with licensing and fees increasing 24% in revenues to $467,000, while sales tax revenues are budgeted to only go up about 1.2% (to about $4.4 million).

Utilities

City staff propose continuing a 3% rate increase to both water and sewer utilities following a 2020 rate study that proposed a 4% water and 2% rate increase through 2030.

Councilors previously agreed to continue the 3% annual rate increase from 2023-2025.

Hagener said a low income discount remains available, following Clallam PUD’s criteria, and 45 residents use the program now.

Staff report average utility bills for single-family residences using 500 cubic feet of water increased an average of 1% in the last 10 years, and many families using 1,000 cubic feet or more of water have seen bills decrease due to the removal of a tiered sewer rate.

“Consensus confirms that regular, smaller rate increases to address rising costs are more manageable for residents than infrequent, larger rate increases,” staff wrote in the budget book.

“We walk the talk when we want to minimize the impact of rate changes on our ratepayers,” Hagener said.

The proposed budget shows water and sewer revenues increasing about 6% and 8% and expenses slightly more for each. Staff report the rates support daily operations and fund expenses related to master planning, capital improvement planning, and debt service.

Capital Projects

The West Sequim Bay Corridor multi-year project is Sequim’s largest capital project at about $12.2 million for 2025. Staff report it will bring city utilities to the area for the first time and allow for full build out of the area’s lots/parcels for sewer, while water will be extended at a later date.

Nick Dostie, Sequim’s city engineer/deputy director of public works, previously said they plan to go to bid for the project in the second or third quarter of 2025, with construction possibly starting in the first quarter of 2026, and pipeline and lift station construction complete in the third or fourth quarter of 2028.

While funding is secured for the corridor project, city staff wrote that Sequim’s Capital Improvement Plan has 51 projects costing about $121 million; however $86 million, or 71% is unfunded, so city staff must secure external funding through grants, low-interest loans, and/or bonds.

In the parks department, funding for new bridges in Carrie Blake Community Park over Bell Creek ($350,000) is secured, while $900,000 for Centennial Place construction, and $500,000 for new equipment at Margaret Kirner Park require funding, according to city documents.

Costs to remove most structures at Gerhardt Park might be moot as the city seeks to auction/surplus off the buildings to save $150,000 in demolition fees.

Some of the other funded projects include $300,000 to increase security at city buildings, $126,500 for a transportation master plan/impact fee update study, $500,000 for development of automatic water meter readers, and $2 million for continued construction of the Silberhorn Road Deep Well.

A few of the unfunded projects include $438,000 for multi-year improvements to the intersection of Fifth Avenue/Washington Street to add turn signals/lanes, $550,000 for two West Washington Street traffic signal cabinet replacement, and $250,000 for bike lane and sidewalk improvements along North Third Avenue from Washington Street to Fir Street.

Other budget notes

• City staff numbers will increase about 0.8 full-time equivalent staffing next year, up to 97.52 FTEs — including the addition of a part-time public works administrator, full-time water operator and two part-time seasonal park workers, following a reduction of a few temporary staffers for retirements and technology installation. Overall, costs are about a 5.5% increase from 2024, from $11.87 million to $12.5 million.

• Community requests for grant funding are budgeted for just under $351,000, or 1.6% of the city’s General Fund, staff report, with $215,000 for social and human services and $136,000 for general programs. Councilors requested more information on a request from the YMCA of the Olympic Peninsula for $85,000 to add a youth navigator for two years, which was not included in the proposed budget.

For more about the City of Sequim’s proposed 2025 budget, visit sequimwa.gov/1286/2025-Proposed-Budget.