Municipal Facility Planning

At the January 2026 City Council Planning Session, the Council directed staff to prepare a full cost estimate for renovation of City Hall. Given the failure of the bond measure, the City Council wanted to ensure they had complete information on the building’s condition to inform facility planning next steps.

The project team reviewed previously completed studies and conducted site visits to verify existing conditions. Additional facility assessment work was performed to support development of the renovation cost estimate.

During the April 7, 2026 City Council meeting, staff and the architectural consultant presented this work to the City Council. The existing City Hall building, constructed in 1957, is nearly 70 years old and does not meet modern building codes, has failing systems, seismic deficiencies, and does not meet Level IV facility standards. The preliminary cost estimate to fully renovate City Hall is between $60M and $63M, with additional details on the scope of the renovation provided in the meeting presentation linked here and the agenda bill linked here.

Based on cost estimate to fully renovate City Hall, which confirms previous findings, the City Manager recommended demolition of the City Hall facility. City Council directed the City Manager to prepare a demolition plan for City Hall and return to the City Council for review and approval.

During the March 3, 2026 City Council meeting, staff presented the results of the statistically valid survey of Mercer Island residents authorized by the City Council to collect community input on the recent Public Safety and Maintenance Facility Bond Measure and inform priorities for future City facility planning (AB 6881). The results and analysis of the statistically valid survey can be viewed here. The survey consultant conducted the survey from January 28 to February 11, 2026 and was able to complete 400 interviews with a statistically valid and representative sample of Mercer Islanders, resulting in a margin of error of +/- 4.9 points.

In addition to a statistically valid survey, the City offered an ‘open’ survey that all residents could access through the City’s regular communication channels. This open survey has the same set of questions as the statistically valid survey. The results of the open survey were generally similar to the statistically valid survey and can be viewed here.

The results of these surveys will inform future policy development for facility replacement strategies. These surveys are just one component of the community engagement strategy for City facilities and staff plan on pursuing additional opportunities for public feedback in the future.

Following the outcome of Proposition 1 in the November 2025 general election – in which the bond measure to fund a new Public Safety and Maintenance Facility did not garner enough votes to pass – the Mercer Island City Council is discussing options to address ongoing facilities needs for the City of Mercer Island.

To gather feedback that will inform this discussion, the City has commissioned an online survey of residents regarding their satisfaction with City-provided services and its approach to facilities planning. The City wants to hear from you! Your participation is crucial to ensure your elected representatives understand the community’s views. Take the survey.

During the January 16, 2026, City Council Planning Session, the City Council debriefed the prior City facilities bond measure and provided initial feedback on the framework to guide the facility planning work anticipated this year (AB 6840).

Proposition No. 1, included on the November 4, 2025, General Election ballot to fund the Public Safety and Maintenance Facility received 54.61% voter approval, which was short of the 60% needed for a successful bond measure.

The discussion included a look back at the history of the City’s long-range facility planning work and a debrief of the Proposition 1 ballot measure. The City Council and staff then discussed reframing the approach to replacing City facilities, use of the newly acquired 9655 Building, and planning for community engagement.

The staff presentation can be viewed at the link here and the recording of the meeting is here.

The facility discussion will continue at the March 3, 2026 Regular City Council meeting when the Council will receive the report on the results from the community survey on the bond measure.

On November 25, 2025 the results of the November general election were certified by King County Elections. Proposition No. 1, included on the November 4, 2025, General Election ballot to fund the Public Safety and Maintenance Facility received 54.61% voter approval, which was short of the 60% needed for a successful bond measure.

This week, the City of Mercer Island mailed residents a fact sheet about Proposition 1, the upcoming bond measure to fund the design and construction of a Public Safety and Maintenance Facility. Proposition 1 will be presented to voters at the November 4, 2025 General Election. This fact sheet has been linked here to Let’s Talk.

Q. What is the cost of the bond measure to property owners per $1,000 of the assessed value of their home?

If the measure is approved, the levy rate is estimated to be $.32/$1,000 of assessed property value in 2026. The levy rate is the tax rate applied to the assessed value of your property.

To calculate the rate, take the estimated average annual debt service of $6.937 million and divide it by the City’s projected assessed value in 2026 (assuming a 3% increase from 2025) of $21.732 billion, then multiply it by 1,000. Assumptions for the PSM Facility include a $103,160,000 cost of the bond, a 4.54% estimated interest rate, and a 25-year term.

This is an estimate because market conditions at the time of the bond sale and the actual assessed value in 2026 will determine the average annual debt service and the overall amount property owners will pay.

These bonds will be structured as “level debt service,” which refers to a specific repayment schedule where the combined annual amount of principal and interest payments (AKA debt service) remains relatively constant over the life of the bond issue. This ensures revenue from the excess levy is adequate to pay the debt service each year over the life of the Unlimited Tax General Obligation (UTGO) bonds. This debt is considered “level” because the City’s debt service amount is held constant throughout the life of the levy, even as assessed property values and levy rates change over time.

Level debt service is advantageous because it provides stability and predictability for both taxpayers and the City for the duration of the levy.

Due to the length of the project, the City will not issue the bonds at once but at staggered intervals to ensure resources on hand for different phases on the PSM Facility’s design and construction.

Q. What happens if my property value goes up in future years? Will I pay more as time goes on?

A. As property value increases, the levy rate will decrease so the annual payment for Mercer Island residents will remain relatively stable year-to-year. This is one of the advantages of structuring the UTGO Bonds as level debt to fund this project. However, given assessed values and the number of properties on the island change over time, the expected tax rate will likely shift slightly producing small variations in what property owners will pay each year.

Q. Will all of the bonds be sold at once?

A. The City will issue bonds at staggered intervals to align with the overall project schedule.

Q. Why will the rate per $1,000 of assessed value change over the term of the bonds?

A. The most significant factor affecting the tax rate is the change in the total assessed value of all properties within the taxing district. The tax rate is calculated by dividing the estimated average annual debt service by the total assessed value of the district, then multiplying it by 1,000. If the total assessed value of all properties in the district increases, the tax rate (dollars per $1,000 of value) decreases. This is because the same total levy amount is being spread across a larger tax base.

For example, if the City issued all $103.16 million bonds in 2026, the levy rate would be $.31 per $1,000 of assessed value in 2027. In 2028, the levy rate would decrease to $.30 per $1,000, assuming the assessed property value on Mercer Island increases 3% during that time. If the assessed value continues to increase 3% per year, by 2050 the levy rate would be $.16 per $1,000 of assessed value, however the amount paid by each household would remain relatively stable.

Q. What is the length of the bond measure?

A. Once the $103.16 million proceeds from the bonds are fully issued to pay for the Public Safety and Maintenance Facility, the resulting debt service will be paid over 25 years.

Q. In the parks levy renewal in 2022, we were asked to approve a levy rate. How is this ballot measure different?

A. The parks levy was a “Levy Lid Lift,” which allows a taxing jurisdiction (in this case the City of Mercer Island) to increase the City’s regular property tax rate for a specific purpose. The parks levy increased property taxes to a maximum of $0.862 per $1,000 for 15 years to help fund operations and maintenance of parks and open spaces, including Luther Burbank Park, and fund playground replacements and forest restoration in Pioneer Park and Engstrom Open Space.

The ballot measure for the proposed Public Safety and Maintenance Facility is an “Excess Levy,” which is an additional property tax over and above the regular property tax rate. Voters are asked to approve a total not-to-exceed amount for the project, and if approved, the amount is repaid over a 25-year period.

At its regular meeting on July 15, 2025, the City Council adopted an ordinance that provides for the submission of a ballot measure in the November 2025 election to issue bonds to fund the design and construction of a Public Safety and Maintenance Facility that will replace the existing Public Works building, maintenance yard, and temporary police facilities.

The new Facility will provide a permanent location for the City’s Police Department, Public Works Maintenance teams, the Emergency Operations Center, Information Technology, Geographic Information Systems, and Customer Service.

For more information on the project and bond measure, visit: Municipal Facility Planning | Let's Talk Mercer Island

The Mercer Island City Council will consider a budget appropriation and financing authorization at its July 15, 2025, City Council meeting to fund the previously announced acquisition of a 22,000-square-foot commercial office building located at 9655 SE 36th St. On July 1, 2025, the City Council authorized the City Manager to execute an agreement to acquire the 9655 Building by eminent domain for $9,060,000.

The building will eventually serve as the permanent location for the Community Planning and Development Department, the Public Works Capital Projects and Engineering teams, and the Youth and Family Services Department.

The 9655 Building will be integrated with the proposed Public Safety and Maintenance Facility as shown in the image below. The design currently includes a surface pedestrian connection between the two properties. Taken together, these facilities will serve as the new home for the departments currently housed in the aging Public Works Building and others displaced due to the permanent closure of City Hall.

At the July 1, 2025 City Council meeting, Ordinance No. 25-13 related to the bond measure for the Public Safety and Maintenance Facility was presented to the City Council for first reading. Staff provided an overview of the elements of City bond ordinances and the current status of City debt. Staff received City Council feedback on draft Ordinance No. 25-13, which includes the ballot title, ballot description, and the length of the repayments scheduled for the bonds (AB 6715). Staff also received City Council feedback on the explanatory statement for the local voter pamphlet.

The City Council formed an ad-hoc working group comprised of Mayor Nice, Deputy Mayor Rosenbaum, and Councilmember Reynolds to work with staff and legal counsel to review the ballot language and explanatory statement and provide a final recommendation to the City Council for consideration at the July 15, 2025 Council meeting.

With the passage of the 1% for Art in Public Places Fund Code Amendments (AB 6725) earlier in the meeting, the City Council directed staff to fully exempt the PSM Facility from the 1% for Art contribution requirement. This reduces the estimated project budget by an estimated $740,000 from $103,900,000 to a total project budget of $103,160,000.

City Council approved unanimously a motion to schedule Ordinance No. 25-13 for second reading at the July 15, 2025 Council meeting. The City Council will also appoint members to the Pro and Con Committees to prepare materials for the voters’ pamphlet at the July 15, 2025 meeting.