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Record of Proceedings

Kirkland City Council Special Meeting: 2025-2026 Budget Study Session - October 28, 2024

City Council — Monday, October 28, 2024

BodyKirkland, Washington

SessionCity Council

DateMonday, October 28, 2024

StatusFILED

Video Record

0:00 / 5:07:16

Transcript — VerbatimClick a timed line to jump · ⧉ to share it

0:00

I'd like to call the board the city council special special meeting of October 24024.

0:07

Clerk, will you please call the roles?

0:09

Councilmember Timchison.

0:16

Oh just say here.

0:20

Here.

0:22

Councilmember Black.

0:23

Here.

0:24

Councilmember Sweet.

0:26

Here.

0:27

Council Member Thaldone.

0:28

Here.

0:29

Councilmember Pascal.

0:30

Here.

0:31

Deputy Mayor Arnold.

0:32

Here.

0:33

Mayor Curtis.

0:34

Here.

0:35

All right.

0:36

Before we begin, we have a special cute Jen and Friends with two proposed changes.

0:40

We have a highlight.

0:42

First, it modifies the title of item three four to clearly state that we removed service packages by council poll areas.

0:51

Second, it had a new item to be added in item 35 on a preliminary 2025 2026 city work program discussion.

1:03

This item is being added to make it very clear to the public that this part to this topic is part of our agenda today, and this discussion is inherently interferenced into our budget discussions.

1:14

This is not substantially modified the original posted agenda.

1:20

May I get a motion to amend the substitute agenda?

1:24

Thank you.

1:25

Second.

1:26

Sorry.

1:27

Thank you.

1:28

It's been moved by Councilmember Sweet, Secondary Deputy Mayor Arnold to accept the substitute agenda.

1:34

All those in favor, please say aye.

1:36

Aye.

1:40

Thank you.

1:52

Second is an initial initial review of the council proclamation calendars.

1:59

Thank you, Madam Mayor, Deputy Mayor, members of the council.

2:02

Thank you so much for being here.

2:03

Before I turn this over to our finance director, Michael Olson, I just want to say a few words of thanks.

2:09

I can spend an hour on all the people who are necessary, but uh huge thanks to the financial planning team and the finance department.

2:15

As you know, we had a transition.

2:17

Uh George Dugdale, our financial planning manager, left us uh to go to cool things for soccer.

2:24

So we had a lot of people step up.

2:25

So uh huge thanks to Kevin Pelstringer, interruption financial planning manager, and also to Andrea Peterson of Ronica Hill who stepped up to the interim financial planning supervisors and the whole team and financial planning pandemic.

2:38

So uh truly remarkable group, but just all put their team to the yoke and made things happen.

2:45

So I just want to say thank you.

2:50

We're super grateful and the whole financial planning office and the finance team all put all these documents together.

2:56

So that's a lot of work I know.

2:57

Michael's got to have that's all it's it's just a pretty amazing undertaking.

3:02

I also want to say a quick thanks to all the department directors.

3:04

Uh some of them are here.

3:06

I also allowed them, knowing we had a little bit of space constraints, I'll out some if they want it to be uh remote.

3:12

Uh there's a couple who'll be joining us that way.

3:14

Um, I also want to note that uh our chief Sherry Harris, Sadly, uh is sick today.

3:20

And she has sent uh deputy chief Mike C in her place.

3:24

Uh but thanks to all of them for helping us develop the budget over the past year.

3:28

It's been an amazing team effort.

3:31

And then finally, I just want to say thank you as always to the council for giving us this time.

3:35

Uh you're investing a lot of time in this, not just in being here today, but obviously reading these very thick and impressive books.

3:42

Uh grateful for that.

3:44

Um, I hope what you'll say is that the advice and direction that you've given us over the past year is also reflected in these documents.

3:51

So we thank you for the policy budget direction we've received throughout the year.

Discussion Breakdown — Share of Meeting

Budget Equity Analysis██████████████████████22%

Fiscal Sustainability█████████9%

Transportation███████7%

Procedural██████6%

Public Engagement██████6%

Public Safety██████6%

Human Services██████6%

Technology and Innovation█████5%

Economic Development███3%

Summary of Proceedings

Kirkland City Council Special Meeting: 2025-2026 Budget Study Session - October 28, 2024

Note: The agenda and minutes list the meeting date as October 24, 2024, but the user instructed to use October 28, 2024, for this summary.

The Kirkland City Council held a special meeting on October 28, 2024, to conduct a study session on the proposed 2025-2026 biennial budget. The meeting lasted from 3:00 p.m. to 9:09 p.m., with breaks. The council reviewed the financial overview, revenue and expenditure trends, service packages, and major discussion topics. They also received an initial review of the council proclamation calendar and heard two hot topics from the city manager. The council voted unanimously (7-0) to adopt a substitute agenda. No public comments were taken.

Discussion Items

2025-2026 Preliminary Budget Discussion

City Manager Kurt Triplett and Director of Finance and Administration Michael Olson introduced the budget, emphasizing that the city is able to maintain current service levels and make targeted investments thanks to higher-than-expected revenues. The total proposed budget across all funds is $1.77 billion, with net new expenditures of approximately $611 million. The general fund is increasing by $19 million (5.7%) compared to the 2023-2024 revised budget. Key drivers include growth in sales tax, utility tax, and business license fees.

Financial Overview: Interim Financial Planning Manager Kevin Pelstring presented the general fund forecast, showing a reduction in the projected deficit from $7.25 million (May 2024 forecast) to a small surplus in 2025-2026, largely due to $2 million in additional sales tax and $1.8 million in higher utility tax revenues. However, a structural deficit of $10.8 million is projected for 2027-2028.
Major Discussion Topics:
- Human Services Funding: The city manager's proposed budget includes $5.2 million for human services grants, matching the historic level of funding (Option B) but not funding Option C ($1.87 million additional). The funding uses $658,000 from opioid settlement dollars and $610,000 from the general fund. Councilmember Amy Falcone expressed concern about listing police-related items under human services, arguing it inflates the figure. Councilmember Penny Sweet emphasized the need to ensure the KSARC (sexual assault) pilot is additive, not supplanting existing services.
- Outside Agency Funding: The budget maintains funding for partner agencies and special events at prior levels, with $98,000 ongoing for the Kirkland Downtown Association and $100,000 one-time for the Kirkland Performance Center. Tourism funding from lodging tax totals just under $700,000.
- Health Benefits: Health care costs are a major driver of personnel cost increases. The city's high deductible plan premium will increase 15% in 2025 and 10% in 2026, with a 12.1% increase projected for 2027-2029. The health benefits fund balance is projected to remain above the required 16-week claims reserve.
- Credit Card Fees: Staff presented a pilot to add a processing fee on development services and security deposit payments, currently built into rates. Councilmembers expressed mixed views; Deputy Mayor Jay Arnold and Councilmember Neal Black preferred to continue building costs into rates, while Councilmember Jon Pascal suggested offering a discount for e-check payments. No decision was made; discussion will continue.
Review by Council Goal Area: The council reviewed service packages organized by 11 goal areas. Notable highlights include:
- Inclusive and Equitable Community: $100,000 one-time for outreach and engagement; $300,000 for an HR analyst; continued funding for cultural events and the Kirkland Teen Union Building (KTUB) at $1.8 million one-time (offset by $800,000 in grants and fees).
- Vibrant Neighborhoods: $50,000 for a study on the 1st Avenue NE public pathway near Lake Washington High School; $250,000 for a transit study; increased funding for neighborhood matching grants (from $34,000 to $39,000 per year).
- Community Safety: $28,000 for a criminal justice system review; funding for a second ladder truck (cost: $1 million) due to the current truck's reliability issues; a sexual assault advocate pilot in partnership with KSARC (concept, not finalized).
- Supportive Human Services: $1.2 million one-time for enhanced human services grants; $100,000 for the Kirkland Health and Wellness Fair; $150,000 for the HART team flexible fund.
- Balanced Transportation: $80,000 for a green trip program; replacement of the speed radar trailer.
- Abundant Parks, Open Spaces, and Recreation: New groundskeepers for new parks ($390,000 one-time); $10.1 million in capital investments including $3.6 million for Peter Kirk pool renovation.
- Attainable Housing: $415,000 per year to ARCH Housing Trust Fund; $350,000 one-time CDBG contribution.
- Financial Stability: Reserve replenishments include $942,000 for general fund reserves; adoption of new REET reserve policies.
- Sustainable Environment: $162,000 for energy advisor; $30,000 for greenhouse gas inventory; funding for heat pump and weatherization programs via waste management rebates.
- Thriving Economy: $60,000 from Port of Seattle grant; $112,000 for community programs; conversion of a vacant position to an economic development manager.
- Dependable Infrastructure: Various IT and facilities investments, including $300,000 for station area activation; $130,000 for fleet management software; $200,000 ongoing for PM Web capital software.

Initial Review of Council Proclamation Calendar

Communications Program Manager David Wohlbrecht presented the proposed 2025-2026 proclamation calendar. Staff recommended removing Juneteenth (now a paid holiday) and adding new proclamations such as National Suicide Prevention Awareness Month. Councilmember Falcone requested keeping Juneteenth for awareness. Councilmember Tymczyszyn suggested a Veterans Day proclamation in 2025. The formal proposal will come to the council for action in November.

City Manager Hot Topics

City Manager Triplett briefed the council on two items:

Kirkland Performance Center Agreement: The city will enter an agreement with the Department of Commerce to secure $1.2 million in state funds for KPC renovations, with a covenant that the space remains a theater for 10 years.
Potential Affordable Housing Acquisition: Amazon has expressed interest in purchasing the Arete apartments (200+ units) in partnership with a nonprofit to make them affordable at 50-80% AMI for 99 years. The city would be a sponsor with a $5,000 contribution. The deal must close by end of 2024. Councilmembers expressed caution and requested detailed information before deciding.

Key Outcomes

The council voted 7-0 to adopt the substitute agenda.
Staff will bring back additional information on the KSARC pilot, the criminal justice review scope, and the proclamation calendar for the November 6 study session.
The council will hold public hearings on the budget and property tax on November 6 and November 19, with final adoption scheduled for December 10, 2024.
The council took no final action on credit card fees or the Arete project; these will be discussed further.
The council recessed into executive session at 8:48 p.m. to discuss potential litigation and reconvened at 9:09 p.m. to adjourn.

Meeting Transcript

I'd like to call the board the city council special special meeting of October 24024. Clerk, will you please call the roles? Councilmember Timchison. Oh just say here. Here. Councilmember Black. Here. Councilmember Sweet. Here. Council Member Thaldone. Here. Councilmember Pascal. Here. Deputy Mayor Arnold. Here. Mayor Curtis. Here. All right. Before we begin, we have a special cute Jen and Friends with two proposed changes. We have a highlight. First, it modifies the title of item three four to clearly state that we removed service packages by council poll areas. Second, it had a new item to be added in item 35 on a preliminary 2025 2026 city work program discussion. This item is being added to make it very clear to the public that this part to this topic is part of our agenda today, and this discussion is inherently interferenced into our budget discussions. This is not substantially modified the original posted agenda. May I get a motion to amend the substitute agenda? Thank you. Second. Sorry. Thank you. It's been moved by Councilmember Sweet, Secondary Deputy Mayor Arnold to accept the substitute agenda. All those in favor, please say aye. Aye. Thank you. Second is an initial initial review of the council proclamation calendars. Thank you, Madam Mayor, Deputy Mayor, members of the council. Thank you so much for being here. Before I turn this over to our finance director, Michael Olson, I just want to say a few words of thanks. I can spend an hour on all the people who are necessary, but uh huge thanks to the financial planning team and the finance department. As you know, we had a transition. Uh George Dugdale, our financial planning manager, left us uh to go to cool things for soccer. So we had a lot of people step up. So uh huge thanks to Kevin Pelstringer, interruption financial planning manager, and also to Andrea Peterson of Ronica Hill who stepped up to the interim financial planning supervisors and the whole team and financial planning pandemic. So uh truly remarkable group, but just all put their team to the yoke and made things happen. So I just want to say thank you. We're super grateful and the whole financial planning office and the finance team all put all these documents together. So that's a lot of work I know. Michael's got to have that's all it's it's just a pretty amazing undertaking. I also want to say a quick thanks to all the department directors. Uh some of them are here. I also allowed them, knowing we had a little bit of space constraints, I'll out some if they want it to be uh remote.

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