Mayor’s 2025 Budget Development Update: Funding Considerations, Tough Conversations, & Achieving Sustainability
In early October 2024, Mayor Friedman released his preliminary 2025 Budget after months of discussions with the City Council and the resident Budget Advisory Committee. This budget aligns with the Mayor’s 2025 Strategic Priorities, reflecting a consensus among elected officials to maintain or enhance service levels across all essential City functions. The Council first reviewed these priorities in May, with ongoing discussions throughout the summer and fall.
Structural Budget Deficit
Since 2019, Clyde Hill has faced a structural budget deficit due in large part to historically high inflation rates ranging up to 9.5%, while reoccurring revenue has not kept pace. With one of the lowest municipal property tax rates in King County and the State of Washington, the owner of an average $3.8 million home in Clyde Hill pays approximately $1,220 annually to the City. In contrast, an owner of a similarly valued home contributes double that amount in Medina (approx. $2,540), and more than triple that amount in Bellevue (approx. $3,700).
The Financial Sustainability Plan adopted by the Council in April 2024 projected a growing deficit in 2025, anticipating the use of one-time savings to bridge the gap until new revenue sources—like a planned Stormwater Utility in 2026 —became available. Recent factors have exacerbated this deficit, highlighting the need for immediate action to identify additional revenue or discuss service reductions.
2025 Budget Expenditures
In developing the preliminary 2025 Budget, City Administration has made concerted efforts to reduce costs, implementing economizations across departments and cutting non-essential activities. Notable reductions include eliminating the annual City Celebration as well as certain part-time positions. However, further meaningful cuts would likely necessitate reductions in full-time staffing, which constitutes about 60% of the City’s operating fund. Reducing staff in police, public works, or general administration could significantly impact the City’s ability to deliver essential services.
Thus, the Mayor’s preliminary budget funds all current full-time staff positions, utilizing reserves to maintain investments in necessary technologies, supplies, and consultant support that employees rely on to do their jobs efficiently and effectively.
The budget fully supports Public Safety, allocating 90% of proposed spending increases to the Police Department. Mayor Friedman and City Administrator Rohla recognize the importance of retaining all existing police officer positions to ensure adequate coverage, promote officer satisfaction, and ultimately maintain access to high-quality police services.
Additionally, the budget funds the currently vacant Public Works Director position, crucial for overseeing maintenance, infrastructure projects, and stormwater management. Not filling this position could hinder routine improvements, limit grant opportunities, delay establishment of the City’s planned Stormwater Utility, and jeopardize compliance with state regulations.
Tough Conversations
In response to suggestions from some City Council members that City Administration look for further ways to meaningfully reduce the 2025 budget deficit, the Mayor and City Administrator have begun evaluating additional short-term options. Although not the preference of City Administration, these options include deferring hiring for vacant positions across the City, including in Public Works and potentially also Police.
The Mayor and City Administrator believe that meaningful discussions with Council about expenditures must include considerations of public safety cuts, particularly the broad-level benefits and impacts on all services delivered. This must include analysis of every department, as cost increases have spread among all operating areas of the City.
Achieving Sustainability
Mayor Friedman and City Administrator Rohla stress the importance of collaboration with the City Council to develop new long-term strategies for financial sustainability. Until this broader discussion occurs and a new consensus is reached, the Mayor believes it is unwise to propose a budget that jeopardizes essential services for Clyde Hill residents.
City Administration urges the Council to adopt the preliminary 2025 Budget and support a focused effort in early 2025 to identify potential service reductions and explore a voter-approved property tax levy lid lift, all while engaging the community in a thoughtful and transparent manner.
Posted October 23, 2024
