Clyde Hill News: $6.3m “Total Deficit 2025-2030,” according to City Finance Director
Clyde Hill News: $6.3m “Total Deficit 2025-2030,” according to City Finance Director
Also: No clear plan or path to sustainable budget; Mayor forms committee
In a late-breaking update, just hours before Tuesday’s city council meeting started, the city published its projection that Clyde Hill’s “Total Deficit 2025-2030” will top $6.3m:
At Tuesday night’s council meeting, Mayor Steve Friedman offered several honest acknowledgments about the city’s financial situation during the discussion of the 2025 budget. For example:
“I will admit we knew that 2025 would be a general fund deficit budget. We didn’t know it would be as big as it is.” (link)
On the topic of last year’s financial sustainability plan, Mayor Friedman candidly offered that:
“the problem is — it’s clear, and I was part of this — it wasn’t enough. It didn’t do enough.” (link)
How to make sense of the city’s financial situation and what’s next from a resident’s point of view, as well as the issues discussed during a 3-2 council vote to approve a $198K planning contract, below.
But first: do you know a high school student interested in journalism? I’m working through options for what’s ahead for this newsletter, and I’d welcome introductions.
Also: next week’s newsletter is unlikely, due to travel and poor connectivity.
Disclaimer: while I am a council member on the Clyde Hill City Council, I write this newsletter in my capacity as an individual resident. Any opinions expressed are my own and not necessarily the position of the city. City information and references here are from public sources. I welcome email responses — and if the topic is about city business I will respond from my city email account.
2025 Budget update
Briefly, the next steps to address the City of Clyde Hill’s financial issues are on two timelines:
In the short-term, for this year’s budget, Mayor Friedman and staff will work to further decrease the 2025 deficit.
Longer term, in pursuit of financial sustainability, Mayor Friedman asked Cm Steve Sinwell to lead a committee to investigate options for consideration to address the city’s long-standing budget issues.
At this time, there is no clear plan to get from the current streak of budget deficits (dating back to 2020) to a sustainable financial plan.1
It’s not clear from Tuesday night’s public discussion when the longer term effort will begin or when to expect an update. At the council meeting, Mayor Friedman and Cm Sinwell discussed the need for another meeting to clarify the scope and direction of the committee effort. That meeting is planned for later this month when Mayor Friedman returns from vacation.
Context and timeline
Each year the mayor and city staff put together and propose the city’s budget. The city council approves the budget by voting on an ordinance, in effect passing a law to authorize how much the city can spend. This process reflects how all spending and revenue collection activity happens through the executive branch.
On Tuesday, the city shared the finance director’s projection of a $6.3m deficit for 2025-30. At the council meeting, Cm Lisa Wissner-Slivka acknowledged this deficit and suggested that it confirmed that the way the city operates is not sustainable.
Earlier this September, city staff shared its first draft of the 2025 budget. The shortfall between the operating fund’s revenue and expenditures — the deficit — in that draft budget exceeds $830K.
The application of one-time revenues and other funds will offset some of the deficit, bringing the planned 2025 “total deficit” to ~$500K.
The city plans to fund the remaining gap between 2025 revenues and expenditures by spending existing funds, mostly one-time revenues from past years.
In November of last year, the city council approved the 2024 budget based on the promise of the sustainability plan from then-Cms Friedman and Bruce Jones, which appeared to fulfill the commitments the council had set in May.
In May of last year, the city council approved then-Cm Friedman’s resolution that it “will only consider budget proposals for 2024 that eliminate the city’s future operating deficit.” (link) That resolution was in response to budget deficits in 2020, 2021, 2022, and 2023.
As noted above in Mayor Friedman’s remarks at Tuesday’s council meeting, that original sustainability plan no longer appears feasible. As a resident, I appreciate the candor and clarity. What’s not clear yet is the path forward.
You can watch the entire discussion here: link.
Shorter-term: decreasing the 2025 Deficit
During Tuesday’s meeting, Mayor said “it’s my intention to do what we can do to lower the 2025 deficit as much as possible” (link) and that “I can’t help but think that there are more cost options in there” (link) to pursue.
Residents can expect an update at the next budget meeting on October 7th.
It’s worth noting that in 2023 there were six public meetings and discussions of budget by October, one in each of January (link), February (link), April (link), July (link), August (link), and September (link) 2023. The city’s 2024 calendar shows no such public meetings.
Longer-term: “Sustainability Committee 2”
One cause for optimism is Cm Sinwell’s four-page “Observations About the Budget (link). The document is both specific and actionable.
At Tuesday’s meeting, after discussion of this document, Mayor Friedman asked Cm Sinwell to lead a new “sustainability committee” effort.
One challenge appears to be the workload and capacity of the city’s full-time staff. Staff has been clear how busy they are with other efforts, like finishing the city’s Comprehensive Plan. City staff appeared to question the formation of this new committee. During the discussion, City Administrator Rohla asked if “this [committee] would be in addition to the budget advisory committee.” The Director of Finance then added to that question “and the finance committee?” (link)
Improving communication with residents
Cm Kim Muromoto called out the need for city staff to improve communications with residents on the budget issues:
“I think we’ve got two problems. One is short-term: a presentation to the citizens to say ‘we’re running a deficit.’ I don’t think that’s going to go over very well.” (Link)
Cm Ryan Olson acknowledged that the city has not communicated the current situation to residents perhaps as clearly as might be desired. He noted that “most residents would be shocked to hear that we’re even considering” cutting services and that Clyde Hill has “done some engagement before with some success and I think we need to do that again.” (Link)
From a resident’s point of view, their statements seem fair and well-founded. Finding a clear statement about the budget situation on the city’s website is not easy. While Clyde Hill Police send a regular email newsletter, the city does not appear to have electronic communication with its residents. While there’s a sign up for “e-notifications,” it’s not clear if any have been sent.
Accountability
After the council meeting last week, a reader asked me how accountability works with respect to Clyde Hill’s goals and the people entrusted to set them and deliver on them.
Here’s one way to look at accountability mechanisms in the executive branch of local city government:
City staff (other than police) are accountable to the city administrator for their performance, judgment, actions, and decisions.
The city administrator is accountable to the mayor for their performance, judgment, actions, and decisions. The city administrator serves at the pleasure of the mayor.
The mayor is accountable to voters every 4 years.
$198K planning contract moves ahead by 3-2 council vote
The mayor and city administrator requested and received city council approval to move ahead with a $198K contract for planning services related to land use code updates (link).
The gist of the 75-minute discussion involved the tension between
the city’s need for outside help to update its land use codes to comply with new state housing laws, and
the city’s performance in managing contractors.
For context, Mayor Friedman explained that
what the public asks for is, they want they want to make sure that we’re stewards of the money and that we are spending it smartly to provide the [city’s] services (link)
The city administrator responded to questions about the city’s performance managing a contractor for the Comprehensive Plan process by explaining that
The contractor we had last time fell apart — that wasn’t not our fault (link)
As a cost-savings measure, the assistant city administrator suggested abbreviating public engagement. (link)
Thank you for reading! Please forward and share with your friends and neighbors, and if you are not already getting this newsletter, subscribing is both easy and free.
Dean Hachamovitch
The Mayor was clear he does not want to cut services, there are no specifics available about how to save money by delivering services “more efficiently and more effectively,” (link) and there are no specific plans for revenue sources that cover the shortfall — just a general statement about a large property tax increase (or “levy lid lift,” link).