Clyde Hill News: Tax increase, fees at core of administration plan to reduce deficit
Impact on Bellevue Christian School, Sacred Heart, Bellevue Schools unclear
More clarity about the administration’s approach to addressing the city’s budget deficit emerged at Thursday afternoon’s scheduled meeting with residents.
Briefly: the problem is revenue, not expenditures. “I think we have a revenue problem in the city,” according to Mayor Steve Friedman (link).
The administration’s proposed solution involves
A city property tax increase (discussed as approximately 50%; details to come)
A new storm water fee (details also not yet available)
Possible spending from the city’s “reserve” (or rainy day) fund
A resident vote on the property tax increase, or “levy lid lift,”1 could happen early as November 2026.
City staff explained plans to hire a consultant to run a social media and marketing campaign supporting the tax increase during Thursday’s discussion. There was no detail available as to the expected cost.
The budget task force will skip its May meeting because of other work deadlines as well as travel schedules, and have its next public meeting June 17th.
City staff will host an open house for the community on May 1st to
“share updates on progress made to date, answer residents’ questions, and share information about the proposed stormwater utility (if timing works out)”
according to the Administrator’s Weekly Report (link).
Highlights from the discussion, below, but first: Yarrow Point Mayor Katy Harris shared an update on the police services contract discussions between Yarrow Point and Clyde Hill with council members at their meeting earlier this month:
“Our goal is to complete the contract negotiations before our next quarterly (July) invoice or determine what our next steps will be if we are unable to come to a satisfactory arrangement.”
Yarrow Point is budgeted to pay over $580K to Clyde Hill for police services in 2025. Here’s the complete letter:
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.
A financial sustainability plan emerges
This week’s newsletter recaps the administration’s plan as it emerged during Thursday’s two-hour meeting.
I want to acknowledge that there were differences of opinion as well as disagreement at the meeting. Residents made comments and observations that I found significant and I think make sense to share with the community. I plan to write about them separately in order to keep the focus below on the administration’s plan.
Please note that the budget numbers as presented are not hard numbers but projections and “notional” (link). The meeting materials are available here (link).
Deficits, growing
The city’s deficit projections show the need to use $1.7 million of “rainy day” reserve funds to maintain the city’s level of expenditure over the next few years:
“City reserves have been virtually unchanged for more than a decade,” according to a previous budget update from Mayor Friedman (link). This would appear to be the first time the city will spend reserves for operating expenses.
General Fund deficit for next year appears smaller because much of it was shifted to another fund (the new Stormwater Utility, still under discussion). That fund also shows a deficit in 2026 (link) and a “loan to the Utility for initial operational expenditures will still be needed,” (link) according to the City Administrator. The amount of that loan is also not yet known.
The premise and the plan
The Mayor ruled out reductions to city staff. The premise underlying the plan involves keeping the city’s non-police headcount the same.
While efforts to reduce spending continue, the impact on the deficit will not be material. According to Mayor Friedman, “If you want the bulk of the problem to be solved, you have to find revenue.” (link)
Part 1: Stormwater utility fee
Following from that premise, the first part of the plan involves buying time and delaying the need to spend the city’s reserves.
To do that, the administration wants to impose a new fee on all properties in Clyde Hill — including Bellevue Christian School, Sacred Heart Church, and Bellevue School District — related to stormwater drainage. This is part of setting up a stormwater utility for the city, and breaking out the costs of the city’s stormwater system into a separate fund.
If the stormwater utility is not established, then current expenditure levels will begin to deplete city reserves sooner.
It’s worth noting that the plan allocates some city hall salaries to the stormwater utility, just as some city hall salaries are currently allocated to the police budget.
Part 2: Property tax increase
The rough preliminary estimate discussed at the meeting was a 50% increase in city property taxes.
Clyde Hill currently collects ~$1.3 million from residents. The “Required transfer from reserves” in the chart above is about half that. There is some buffering in this rough estimate given possible growth in the deficit over time as well as the difficulty in asking residents to approve a tax increase.
The specifics of the increase are being investigated now.
Impact on Bellevue Christian School, Sacred Heart Church, and BSD
Of the $385,000 of stormwater utility revenue that the city expects from properties in the city, it’s not clear how much will come from residents and how much from the schools and church in Clyde Hill. According to Mayor Friedman:
Not sure yet, as we still are finalizing rates. I expect that it is a material amount, more in the 20% level. That is my guess and is just instinct, no specific facts yet. (link)
Bellevue School District recently announced $20 million in spending cuts (link) in response to a “perfect storm” (link) of issues it has faced.
Rezoning
Another possibility for revenue generation discussed at the meeting involves rezoning. By permitting more businesses to operate in Clyde Hill, the city could take in more sales tax revenue.
There are no details or timeline on this proposal.
It’s not clear what businesses could succeed given the cost of real estate here, or how residents would feel about a business like a restaurant or cannabis dispensary opening next door to them.
Resident feedback ahead
The city will hold an open house to discuss the budget situation and plan on Thursday, May 1st at City Hall.
You can also reach your elected officials via email at these addresses:
"Mayor Friedman" <Mayor@clydehill.org>; "Councilmember Wissner-Slivka" <council1@clydehill.org>; "Councilmember Sinwell" <council2@clydehill.org>; "Councilmember Andonian" <council3@clydehill.org>; "Councilmember Olson" <council4@clydehill.org>; "Councilmember Hachamovitch" <council5@clydehill.org>
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Dean Hachamovitch