Kenmore council confronts $20M structural gap; considers MPD, levy lid lift and councilmanic taxes

City Manager Terry opened the budget portion of the retreat by reminding the council that financial sustainability is the city’s top priority for 2026 and that staff had provided a detailed forecast on Feb. 23. She laid out three broad paths: revenue, further efficiencies, or cuts, and asked the council to provide policy direction rather than rate details.

Staff summarized candidate councilmanic revenue levers already built into forecast models: a transportation sales tax (0.1 percentage point), an optional public safety sales tax, car‑tab increases, surface‑water or utility fees, and cable/communications fees. Council members debated whether to pursue smaller, quicker councilmanic steps that start revenue sooner or a larger property‑tax measure that would require voter approval but could provide more structural relief.

The city’s largest single general‑fund driver is public safety. Several councilors endorsed commissioning an updated police services study to re‑examine contract costs and alternatives (independence, shared services with neighboring cities), with staff suggesting mid‑January deliverables for an initial consultant phase. Others warned that standalone public‑safety levies have recently failed in neighboring jurisdictions and urged careful framing.

Property‑tax options triggered the most intense debate. Staff described three property tax concepts: (1) a levy lid lift focused on public safety (or public safety plus human services), (2) creation of a Metropolitan Park District (MPD) to fund parks, restoration and capital projects (and free up general‑fund dollars), and (3) a bundled “Kenmore options” package combining climate action, affordable housing, economic development and human services. MPs noted MPD’s legal and timing constraints (new board formation, November certification deadlines) that can delay collections one full year, while levies could produce revenue more quickly but may be politically challenging.

Councilors discussed timing tradeoffs: higher turnout elections (even‑year presidential cycles) may improve prospects for some measures but give staff and advocates less time to campaign; earlier special elections or primary ballots can be used but collection start dates and MPD board processes must be considered. Several members asked staff to prepare clearer project lists, rebate/exemption options for low‑income or senior homeowners, and contingency (cut) plans if measures fail. There was no formal motion or vote; councilors agreed to continue deliberations in follow‑up study sessions and for staff to scope timelines and costs for proposed measures.