Clyde Hill News: Budget deficit update
Also: State lawmakers unanimously approve bill to permit cafes anywhere in residential zones
Clyde Hill’s administration reported a $56,025 operating deficit as it closed the books on the 2023 budget, an improvement to the original plan of a $490,965 deficit. The difference was a result of salary savings from unfilled positions and deferred work on the city’s stormwater problems, according to a city official responding to questions during the city council meeting earlier this week.
More details on this topic and other items of interest to residents from the city council meeting, below, as well as an update about legislation that would require Clyde Hill and every other city and town in the state to permit the operation of neighborhood cafés anywhere in residential zones.
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. 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.
Budget clarity
While the administration’s 22 page report about 2023’s finances (link) offers a lot of data, there’s not much for residents trying to make sense of the big picture or how the city intends to make progress toward a sustainable financial plan.
The big picture
The main budget concern is the General Fund. This is the city’s operational budget, spent on delivering services to residents.
The city ended 2023 with a smaller General Fund deficit than initially planned. Always good to celebrate good news, and at the same time: running a smaller deficit, while better, is not sustainable. It is unclear how deliberate or accidental the smaller deficit was.
Briefly:
The city’s planned spend was ~$5.67m against revenues of ~$5.2m.
The city’s actual spend was ~$5.25m against revenues of ~$5.2m.
On the revenue side, it’s worth noting that higher interest rates helped the city. Investment income exceeded the expected amount by ~35%, and made up for other revenue shortfalls. (The city recorded investment income of $438K, about $112K more than the expected $326K.)
In terms of expenditures, the report notes that “All departments underspent their annual operating budgets contributing to the positive variance.” The bulk of the underspending was in salary, legal services, and stormwater. (Clyde Hill’s $473K of American Rescue Plan Act (ARPA) funds also helped fund the shortfall.)
Looking ahead
Mayor Friedman has been clear, repeatedly, about the importance of a sustainable, balanced budget (link).
So far, there is no plan from city staff to address the cost side of the budget deficit. Staff informed the community as recently as August 2023 that it “has little discretion to reduce general fund costs” (link, slide 14) short of cutting staff.
City staff’s focus appears to be on raising taxes. The previous mayor called a tax hike the city’s easiest option (link).
For context, Clyde Hill has operated with a budget deficit for the last four years (link). Discussions about how to “improve long-term financial sustainability” or how to “make adjustments to revenue and expense to correct our historical imbalance” (“July 2023 Budget Advisory Committee,” link, slide 20) have not generated any specific plan.
Stormwater and more
Some other outcomes from Tuesday’s city council meeting:
Stormwater
The city’s plans for a stormwater utility advanced, with the city council approving the administration’s rate plan. Just as with King County property taxes, there will be a discount available for senior, disabled, and low income residents. So far, there is no additional information about the remaining work related to the stormwater utility.
Comprehensive Plan delay
The city’s troubled comprehensive plan project will be one month later than previously promised, administration officials announced. That delay can be reduced to two weeks if the Planning Commission agrees to an extra meeting, according to city officials.
“Middle housing ordinance”
The administration will consider alternatives in developing a “middle housing ordinance” ahead of asking the city council to approve an additional $35K to the consulting firm that is currently working on the Comprehensive Plan.
Possible changes ahead to city laws
The city council agreed to consider changes (1) to address residents’ concerns about noise from gas-powered lawn equipment as well as (2) to decriminalize the keeping of chickens (but not roosters) in the city.
Cafés everywhere
“The Washington State House of Representatives unanimously voted in favor of legislation” (link) that would require every city and town in the state to permit the operation of neighborhood cafés anywhere in a residential zone.
If you have an opinion about cafés opening up anywhere in Clyde Hill, Medina, Yarrow Point, or Hunts Point, feel free to reach out to our representatives — Rep Vandana Slatter (link) and Rep Amy Walen (link) — who voted for this change, as well as to our State Senator Patty Kuderer (link) who will vote on the matter when the senate considers the bill.
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Dean Hachamovitch