City Budget

CITY MANAGER's MESSAGE FOR THE 2026 BUDGET

November 2025

I’m honored to work with a truly fantastic team to deliver this balanced budget for City Council consideration that provides core services that you expect and depend on, conveys consistent momentum, balances level of service with ability to pay, and plans responsibly for the future. This budget builds on previous years’ efforts and looks out much further than 2026 with a grounding in financial sustainability principles.

How’d we get here? Development of our annual budget takes nearly half a year. Starting with the annual strategic workplan retreat in July, it includes input from departments and their budget requests, revenue estimates, review of policies, a grounding in our fiscal reality, and touchpoints and refinement with the community and City Council. For this budget, it also included a “budget roadshow” to local service clubs, community coffees, the PT Farmers Market, and on the radio – an attempt to better engage, inform, and reflect community priorities. We also rolled out a new budget video – watch it (linked above) and share.

What’s in the 2026 budget? With 36 individual funds across a broad range of services, City of Port Townsend budgets do not lack detail. This year, we aim to simplify and make the budget easier to understand by organizing it in line with the Government Finance Officers Association (GFOA) Distinguished Budget Presentation Awards program.

A few highlights from this year’s budget:

• Investing in Streets. Our Streets program languished for years as state funding for local streets evaporated decades ago. With the voter-approved Transportation Benefit District and our streak of leveraging grants, we are building back from years of neglect. Estimated* 2026 investment: $8m.
   
• Investing in Housing. A range of City resources support affordable/attainable housing, including development charge deferrals and permit fee waivers (estimated at $150,000 in this budget), contributions to the City/Jefferson County Housing Fund Board for grants to housing providers (collectively allocating $1.5m last year), housing grant support and code updates (estimated at $195,000 in this budget), support for the Winter Welcoming Center, and subsidy for the Food Bank, among other investments. With the Comprehensive Plan complete as of 2025, implementation in 2026 and beyond will be a game-changer for more attainable and affordable housing. It also puts the City – and our community – on more stable economic footing in the long haul. Estimated* 2026 investment: $550,000.
   
• Investing in Water. We are now four years into our agreement with the Port Townsend Paper Company that, for the first time in a century, sets aside needed funding for repair and replacement of the water line. While those funds wait to be invested in materials, they are being invested in the bank – and earning $300,000 a year in interest. Estimated* 2026 investment: $4.4m.
   
• Investing in Parks. Our Parks system has much to offer, but has been challenged by inconsistent funding and maintenance catch-up. Focused attention to parks planning and partnerships helped us secure our first state parks grant in 20 years, with a $500,000 playground on the way in 2026. Bringing the library, parks, and arts together in 2025 into one department helps us build collective strength and efficiency. Estimated* 2026 investment: $2.3m.
   
• Investing in Sewer. While the Wastewater Treatment Plant won a record 27th straight year of awards, the pipe and pump system shows its age and years of deferred maintenance. Our rate model helps us make improvements, and grant funding and an income-based discount for customers helps offset rate impacts. Estimated* 2026 investment: $8.5m.
   
• Bolstering a New Rainy-Day Fund. Created in 2025, the fund continues to build for that rainy day in order to keep momentum going when the economy tries to slow us down. Conservative revenue estimates also keep us from overextending on staff or projects and having to scale back. Estimated* 2026 investment: $100,000.
   
• Paying It Forward with Equipment Reserve. Our City Fleets and Facilities are notoriously unpredictable, and budgeting maintenance and replacement from year to year equally so. Committing to a setaside fund for fleets and another one for facilities allows us to get on a regular schedule of repair and replacement, significantly reducing unpredictable budget impacts. Estimated* 2026 investment: $1.24m. Including $490,000 for fleets reserve and $450,000 for facilities reserve.

*Estimated: The investment numbers are preliminary estimates and, include grants received (but not grants anticipated). Also note that projects may either carry forward from 2025 into 2026 or from 2026 to 2027 which affects final numbers.

We’re on a multi-year journey to build back from underinvestment, gaining momentum by changing our practices and philosophy. After all, we can’t predict exactly what 2026 or future years may hold, but we can ensure we’re ready for almost anything with a balanced, smart, and fiscally prudent budget that puts us on stable footing for years to come.

I encourage you to read through these pages and stay engaged in the budget process. Feel free also to reach out to me with your thoughts by email at jmauro@cityofpt.us, attend one of my coffee conversations each first Friday of the month (see e-newsletter or the City’s Facebook page for details), or tune in to my regular show on KPTZ each Thursday at 12:30. Better yet, I invite you to explore and discover ways you might be able to get involved to help us deliver on our collective aspirations for a healthier, more resilient, more inclusive Port Townsend for us all.

John Mauro

Find the 2026 Adopted City Budget linked below.