Draft Shoreline budget would increase funding for a pool and homelessness while avoiding recession risk

The Shoreline city council reviewed the city’s financial report and draft budget and capital improvement plan at the September 16 city council meeting.

City staff told the council, “the City continues to maintain a healthy financial position, including maintenance of its AA+ bond rating and a Standard & Poor’s (S&P) ratings outlook of “stable.” The proposed 2025-2026 Biennial Budget will continue to be balanced and in compliance with the City’s financial and reserve policies.”

The proposed budget includes more funding for human services and homelessness and money for another aquatics center ballot measure.

The city also wants $720.9k to ask voters (again) to approve an aquatics center on the November 2026 general election ballot. A bond measure in 2019 to pay for the pool failed to pass because it required 60% approval and only received 54% of the votes. In 2020, the city bought the storage court north of city hall as the future site of the aquatics center and (according to the city’s 2024 financial report) earned $662,518 on the property. Now the city wants to spend $720.9k on “public engagement, planning, conceptual design, cost estimating, ballot measure development, and preparation for design development and permitting” for the pool.

Currently the city plans to spend $624,112 next year on human services and homelessness - 1.0% of its general fund revenues. The city wants to increase that funding by $323.4k to dedicate a full-time employee to focus on managing the city’s human services programs and data collection. And the city would increase support the Shoreline Lake Forest Park Senior Center, homelessness outreach, severe weather sheltering, utility assistance, and holiday baskets.

The city also requested $100k to commission an Affordable Housing Feasibility Study. Despite repeated resident requests for the city to take action on homelessness, in April, the Shoreline council approved a housing and human services plan that recommended the city instead “Maintain Current Level of Service” while city staff continue to study the problem.

Last week, the council reviewed the biennial resident satisfaction survey in which residents said, of all city services, they were most dissatisfied with Shoreline’s “overall response to homelessness” and residents said the city should do more to address homelessness - more than any other city service. In 2020 and again in 2022, residents told the city the same.

The city council will review a report from the King County Regional Homelessness Authority at the September 23 meeting and city staff said they will present the council with specifics on the human services and homelessness plan at the October 21 meeting.

The city is forecasting the probability of a recession in 2025 or 2026 at about 30-45% - which would not only exacerbate homelessness but could also lower revenue from sales tax and property taxes.

Because of high Interest rates and construction costs revenue from real estate fees and taxes have decreased. Compared to last year, Real Estate Excise Tax revenue for streets and sidewalks are down nearly 25% and Park Impact Fee revenue for park improvements are down more than 50%.

Sales tax revenue was up nearly 25% compared to last year but the city is forecasting revenue to remain flat as construction cools in the city.

The city’s largest revenue source is property tax. When shoreline voters last approved a levy lid lift in 2022, the city said the property tax rate would be $1.39 per $1000 of assessed value. With cooling real estate sales, the King County Assessor decreased Shoreline’s assessed value in 2024, resulting in a higher tax rate of $1.62 per $1000.

Under state law, the combined property tax rate for the city, fire department and library may not exceed $3.60 per $1000. Libraries are allowed to charge up to $0.50 and fire departments can charge as much as $1.50 of that $3.60 per $1000.

Which means that if Shoreline’s assessed value continues to decline and the fire department and library also increase their rates, the city could reach the maximum property tax limit leading to a budget shortfall.

The city council will hold public hearings on the proposed budget, property taxes, fees, and Capital Improvement Plan on November 4 and November 18.

A graph from the city shows Shoreline operating budget forecast

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