Kenmore council discussed tax and fee options to close a projected $20 million budget gap

What the records say

At a special meeting on February 23, 2026, City Manager Teri Killgore and Finance & Administration Director Melinda Merrell presented a six-year financial forecast showing that major costs, particularly public safety and park operations, are projected to grow faster than key revenues, producing annual operating deficits beginning in 2027 and a cumulative gap of roughly $20 million by 2032. Staff identified three levers — new revenues, cost reductions and efficiencies, and revisiting key assumptions — and reviewed both councilmanic actions and voter-approved measures. The discussion was for direction only; the available records do not show any decision made that night ¹.

• The six-year forecast projected annual operating deficits beginning in 2027 and a cumulative gap of roughly $20 million by 2032, driven by public safety and park costs growing faster than key revenues.
• Under current policies, general fund reserves were expected to fall below the 20 percent target around 2028–2029.
• Options ranged from councilmanic actions (vehicle license fee and utility tax increases, a transportation or public safety sales tax) to voter-approved measures (a Metropolitan Park District and levy lid lifts for public safety).
• Discussion favored a combination of revenue tools and efficiencies, with earlier action noted as reducing the size of any future revenue request.
• Councilmembers asked for additional cost-benefit information and clarified points about CAPE revenue, court cost uncertainties, banked property tax capacity, and previously implemented Financial Sustainability Plan items such as LED streetlight conversions.

Why it matters

A gap this size affects every Kenmore household because closing it would likely mean higher taxes or fees, cuts to services such as public safety and parks, or both. Some options reviewed, like a Metropolitan Park District or levy lid lifts, would require a public vote, meaning residents could eventually see a ballot measure. The record frames the choice as preserving services while keeping reserves at the city's 20 percent target ¹.

What changed / what's next

• At the February 23, 2026 special meeting, the council discussed revenue options and a projected structural imbalance, with operating deficits expected to begin in 2027 and reserves forecast to fall below the 20 percent target around 2028–2029 ¹.
• The available records do not establish any council decision or direction resulting from the February 23 discussion; any move toward a specific measure would appear in later records ¹.
• Councilmembers requested additional cost-benefit information on the revenue options, which could feed a future agenda item or discussions of regional ballot timing ¹.
• The available records do not establish the meeting's outcome.