Clyde Hill News: Property Tax 101 for a $3.4 Billion Square Mile
Also: Budget Advisory Committee, and the Administration’s draft 2023 priorities
First, here’s another example of the great views in Clyde Hill. This one is just east of 92nd and 20th:
One more item before our disclaimer: if you find this newsletter useful or interesting, please forward it to your Clyde Hill neighbors and friends. Thank you!
Disclaimer: while I am a councilmember 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. The 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.
Finance… yay :\
With the Budget Advisory Meeting coming up this week on the 18th (agenda available here, link), this issue of the newsletter seemed like a good opportunity to ease into City finances.
How do Property Taxes fit in to the budget?
The property taxes Clyde Hill residents will pay this year provide about 29% of the City’s operating revenue, or ~$1.3m of the City’s ~$4.5m general fund revenues:
Levies
Every year the City Council passes “an ordinance certifying the amount of taxes to be levied on its behalf” (link). For 2022, that’s the number in the table above: ~$1.3m.
King County does the math — based on the value assessed for each property in the county — and collection and subsequent distribution of funds for all the levies: the City as well as schools, emergency medical services, library, etc.
Here’s an excerpt from King County’s 2022 book of levies and codes for its taxing districts (link) with Clyde Hill’s key number (“0.37135”, City Levy) highlighted in yellow:
(The fine print: “R” refers to the regular levy per $1,000 of assessed value. “F” refers to the “Senior Citizen Exempt” levy (more information about senior citizen tax relief here, link). Almost all the homes in Clyde Hill are Levy Code 1053. The “CONS LEVY” is the consolidation of the levies for the state school fund, veteran’s aid, parks, transportation, and more.)
“Taxes collected this year [2022] are based on the value of the property on January 1, 2021.” (link)
Only 5% for Clyde Hill…
For example, a property in Clyde Hill with an assessed value of $1,000,000 will pay a total of $7,728.71 to King County in property taxes.
Of that total, $371.35, or about 5%, will go to the City of Clyde Hill.
The $3.4 Billion Square Mile
That arithmetic reflects how much of Clyde Hill’s overall residential real estate value — about $3.4 billion — each household represents:
Running at a deficit
While property taxes represent the biggest line item that funds our city services:
The City is limited in how much it can raise property taxes; more detail on that here (link).
City expenses — particularly salaries, many of which are linked to cost of living indexes — are rising faster than revenue.
From the last page of the Administration’s memo to the Budget Advisory Committee for this week’s meeting (link):
[T]he City has been operating at a deficit for the past few years…. It is… the unrestricted revenue stream that is the problem…. Previous Councils and Administrations have not successfully addressed this issue, and further action is required.
Bellevue school construction & the budget deficit
There’s a simple reason Clyde Hill has been able to subsidize a budget deficit from savings for so long.
Over the last ten years, the sales tax from two major construction projects created revenue spikes that enabled Clyde Hill to keep spending as it has: the Chinook Middle School construction project (the purple bar below) and the Clyde Hill Elementary construction project (the green bar below).
The City of Clyde Hill collected sales tax on every item (nails, lumber, windows…) purchased to build the schools. As a community, we are about to luck out again with a spike of sales tax revenue from the upcoming reconstruction of the Fire Station by City Hall.
This is not a new issue. City budget reports have noted this as an issue in the past. No one believes this is a sustainable approach. We just haven’t done anything about it yet.
City Priorities
For the Budget Advisory Committee meeting on the 18th, the City offered a draft of its priorities for 2023 (link).
A good first cut
From the memo, here are the “Recommendations Re: Priorities.”
The list is a healthy first cut that raises some good issues. At the same time, the items are all over the map in terms of scope and complexity. It’s more of a list than a plan. Feedback and discussion will improve it. If you have feedback ahead of Thursday’s meeting, you can email it to council@clydehill.org to let the City Council know what you think.
Continue work on the 2024 Comprehensive Plan Update
Address the structural budgetary imbalance in current service levels (Operating Expenditures exceed Operating Revenue)
Formation of a Stormwater Utility
Address staffing needs (e.g. create a dedicated PRO position(Admin/PD)), implement salary ranges, retention tools, and training plans)
Update the Facility Master Plan to include replacement of a new City Hall, Police Department and Public Works Building into a consolidated municipal campus
Implement Required Code Changes (e.g. Change in Form of Government, if necessary, Title 17, etc.)
Improve relations between branches of government
Increase community engagement, communication, and transparency, starting with the rollout of a new City Website
Determine uses of remaining ARPA funds
Establish use of cameras with the Police Department (i.e. Body cams, FLOCK)
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Dean Hachamovitch