Clyde Hill News: City revises budget deficit projections, twice
Clyde Hill News: City revises budget deficit projections, twice
Also: Planning commission mission accomplished; path to compliance with new state laws unclear
The city’s finance professionals revised their budget deficit projections down and then up again following September’s council meeting.
Continuing the city’s issues with communication, these changes appear to have surprised residents on the Budget Advisory Committee as well as the Mayor and the city council. The Mayor’s proposed 2025 budget has an operating deficit ranging between $340K and $800K, depending on how residents look at it.
Clyde Hill will hold a public hearing about the proposed budget on Monday, October 7th, at 4:30pm at City Hall and online.
Below, what these deficit numbers mean from a resident’s point of view, and what residents can do, as well as an update on the Planning Commission’s work related to proposed changes to the municipal code.
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.
Fog of city finance: making sense of the deficits
From a resident’s point of view, the city’s financial situation is not clear. Even after boiling down all the information the city has made available, what that information means is not clear either.
One way to make sense of the situation is that residents (including elected officials) and the full-time paid professionals in the city’s administration are at an impasse. While there’s agreement that there’s a budget deficit problem:
The professionals haven’t offered specific solutions (beyond the broad guidance to cut services and raise taxes).
It’s not clear what guidance or information the professionals are seeking ahead of offering solution options.
Residents’ concerns about communication are becoming more acute.
Expenditures on services, versus revenues
“The Deficit Problem” is not new. The city made clear in 20201 that
The city has “a structural issue.”
The city’s “expenditures are growing faster than revenues.”
The use of reserves or one-time revenues to balance the budget is “not a sustainable long-term strategy.” (link)
The city administrator and previous mayor acknowledged and re-stated this problem in each subsequent budget. Specifics beyond “cut services, raise taxes” have been scarce.
Communicating swings in budget deficit projections
It’s hard to see how communication has gotten clearer or better during the development of the 2025 budget. At the September city meeting, two council members commented on the need to improve communication with respect to the budget and finance issues (link). In 2023, the city held six public meetings and discussions dedicated to the budget before October; in 2024, there were none (link).
The latest communication wrinkle involves longer-term projections of the city’s deficits:
At the September 10 council meeting, the city’s finance director presented a “Total Deficit 2025-2030” projection of $6.3m. That projection was made public just a few hours before the meeting.
On September 12th, the finance director published a revised deficit projection on the city’s website (that was later removed from the site). That projection of the total deficit was $3.4m, or 46% lower, but for a different set of years (2024-2029).
On September 24th, the finance director published another revised projection, estimating the “Total Deficit 2024-2030” at $4.3m.
It’s not clear how to compare these projections, as they span different ranges of years (2025-30 v 2024-29 v 2024-30).
The first restatement (from September 12) appears to take into account several million dollars of taxes on residents (related to forming a stormwater utility) that the city administration is recommending that the council approve. It’s not clear how this material amount was initially missed.
Continuing the city’s issues with communication, these changes appear to have surprised residents on the Budget Advisory Committee as well as the city council. A member of the Budget Advisory Committee, when asked if he had received an update about the restatements, responded plainly: “Nope.”
Deficit ranges
The mayor’s most recent proposed 2025 budget has an operating deficit ranging between $340K and $800K, depending on how residents look at it:
The most recent draft proposed budget shows a “Deficit” amount, reflecting how General Fund expenditures exceed revenues by ~$837K. From one point of view, that’s the General Fund’s operating deficit.
The most recent draft proposed budget also shows a “Total Deficit” amount, ~$499K, after a “Total Transfer In” from another city fund to offset the shortfall. From another point of view, that’s the deficit.
It’s not clear from the city’s communication whether the funds being “transferred in” to offset the shortfall are recurring revenue the city can rely on or one-time, special revenues, like the $1m American Rescue Plan Act (“ARPA”) grant the city received several years ago. In other words, if the city had the same shortfall between revenue and expenditure next year, it’s not clear if the same funds to “transfer in” would be available.
Making matters a little more confusing: the September 10, 12, and 24 deficit projections from the city have different “transfer in” values to offset the shortfall between General Fund revenues and expenditures for residents to choose from:
Making sense of what it means, and what can residents do
Making sense of what all this means, much less what to do, as a resident, is not easy.
The full-time professional administrators entrusted with the authority to run the city are running the budget process the same way they always have. From the City of Clyde Hill’s Budget Book 2024:
As a resident, the guidance I’d offer other residents is:
Ask elected officials (mayor, city council members) and the full-time professional staff to explain what’s going on.
I got involved after a council member told me about the deficit back in 2021. As this newsletter attests, making sense — as a resident — of what the city is doing and how things work is an opportunity to learn.
For context, most residents have been less than vocal about the city budget over the last few years. Here are the minutes from the 2023 city meeting that adopted the most recent budget; note that there were no public comments at the hearing:
For all we know, Clyde Hill residents would be delighted with a big tax hike to keep things going exactly as they are. The silence from the community makes it hard to be sure. Based on my conversations with other residents, there seem to be a bunch of ways we could be doing better.
“The October 7th [city] meeting includes a public hearing on the budget,” according to the city’s website (link). Public hearings are intended “to obtain public testimony or comment before significant decisions are made.” (link)
Planning Commission mission accomplished
In what was likely its last meeting of 2024, the Planning Commission’s chair congratulated the group and city staff on a “job well done,” noting that “everything we wanted to do, we accomplished” and “we did everything on time.”
At its meeting last week, the Planning Commission finished its review of proposed changes to the city’s regulations related to code enforcement, voting to return the draft text to the city council. Commission recommendations included (1) eliminating anonymous complaints (based on shared experiences of weaponized and retaliatory behavior) and (2) giving residents more than 10 days to respond to notices of violation. The next step is for the city council to consider the recommendations and vote on changing the actual city code.
Next meeting and path to compliance unclear
Whether the Planning Commission will meet again in 2024 is unclear, primarily because the city does not have draft text for the Commission to work on in October, as well as the challenge of scheduling Commission meetings during the holiday season.
Clyde Hill still needs to update its municipal code by June 2025 to comply with new state laws related to “middle housing” and accessory dwelling units, or “ADUs” (link).
The Assistant City Administrator explained that “the issue that we’re facing is that we do not have draft language for” the changes the city needs to make to comply with new state laws.
“That probably won’t happen until early November,” according to the Assistant City Administrator.
The Planning Commission has been clear that they want specific language and draft code to consider in order to advise the city council on proposed changes. That preference was re-articulated at their most recent meeting (link).
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Dean Hachamovitch