DRAFT 2019 BUDGET GENERAL FUND REVENUE

General Fund 2019 Budgeted Revenue: $5,012,400Change from 2018 to 2019: $316,275 6.7%

General Fund Change FromMajor Highlights Revenues 18 to 19

Base ($194); Construction ($262.5); BSD ($320.6); BCS ($72.9) Sales Tax $260,000Continued Fed rate increases Interest Income $40,000

Similar level of residential development Development Revenue $25,000Minimal expected equipment surplus Sale of Surplus Property ($21,500)

Continued downtrend in Cellular and CATV Utility Tax & Franchise Fees ($17,400)Police service cost change Yarrow Point Police Contract $14,900

Increases to existing leases Space & Facility Leases $9,175All Other Revenue $6,100

Note: #'s in () are in thousands $316,275

Without School Development ($988,225): ($672,150) -14.3%

Highlights

DRAFT 2019 BUDGETGENERAL FUND

REVENUE

Real Estate Excise Tax (REET) – 1st & 2nd Quarter Percent Fund: Projects (Restricted) Department: Capital Projects BARS Number: 301…318.34 & 35

ACTUAL ACTUAL ACTUAL ACTUAL BUDGET Estimated

YEAR END Draft

BUDGET 2014 2015 2016 2017 2018 2018 2019

528,389 897,903 1,050,159 889,101 900,000 1,280,000 900,000

Forecast Notes:

These restricted revenue sources are excise taxes imposed on the sale of real property and dedicated to local capital projects identified in RCW 82.46.010. Sellers of real property pay a total of 1.78% of the sales price at the time title transfers to the buyer. REET’s 1 (.25%) & 2 (.25%) make up .50% of the 1.78%. REET is recorded on the City’s books in the Capital Projects Department of the Projects Fund. REET 1 can be used for any capital improvement identified in the RCW listed above. REET 2 is more restrictive per RCW 82.46.035(5) and can only be used on capital projects specified in the City’s capital facilities plan and generally excludes parks (large cities complain this distinction is too restrictive, but for Clyde Hill it has not proven to be a problem because this revenue is used for road, storm sewer or sidewalk construction). The 2015 State Legislature allowed cities to use REET for “limited maintenance” of capital assets (i.e. streets, storm) with spending thresholds and additional reporting requirements. The 2019 Draft Budget number remains the same reflecting fewer home sales at higher sales prices.

http://app.leg.wa.gov/rcw/default.aspx?cite=82.46.010

http://app.leg.wa.gov/rcw/default.aspx?cite=82.46.035

Total New LevyRegular Levy Construction Only Levy

Levy % Increase % Increase % Increase Per $1,0002005 $755,281 2.6% 2.6% 0.0% 0.70702006 $772,278 2.3% 2.3% 0.0% 0.65142007 $796,031 3.1% 3.1% 0.0% 0.61062008 $816,628 2.6% 2.6% 0.0% 0.51762009 $910,673 11.5% 2.9% 8.6% 0.51002010 $934,878 2.7% 1.7% 1.0% 0.65082011 $943,517 0.9% -0.1% 1.0% 0.74672012 $952,455 0.9% 0.9% 0.0% 0.74822013 $960,201 0.8% 0.8% 0.0% 0.75172014 $988,270 2.9% 2.9% 0.0% 0.60612015 $1,010,286 2.2% 2.2% 0.0% 0.51932016 $1,011,590 0.1% 0.0% 0.0% 0.48782017 $1,012,689 0.1% 0.0% 0.0% 0.44652018 $1,012,891 0.0% 0.0% 0.0% 0.4009

Estm. 2019 $1,013,891 0.1% 0.0% 0.0% 0.34525 - yr Avg. $1,012,269 0.5% 0.4% 0.0% 0.4399

15 - yr Avg. $926,104 2.2% 1.5% 0.7% 0.5800

$1,012,891 2019 Property Tax Levy $0 1% Levy Increase$0

$1,000$0 New Construction Levy$0 Banked Capacity ($123,923 now - $164,353 if implemented)

$1,013,891 Total 2019 Property Tax Levy

$73,748,171

$2,936,837,0320.3452

2019 Draft Budget includes $1,014,000 in Property Tax Revenues

Estimated 2019 Tax Rate

2019 Property Tax0% + No New Construction

Omitted Assessment Levy Relevy for prior year refunds

Value of New Construction (Not Certified)

2018 City Assessed Value (Not Certified)

% Change % Change TotalInfor. For Taxes For New For General LevyFrom Due In Assessed Value % Change Levy % Change Construction** Levy Only Change Value % Change Levy % Change Levy Rate% Change

2018 2019* $2,936,837,032 15.1% $1,014,000 0.1% 0.0% 0.0% $1,109 $72,748,171 24.6% $29,266 12.3% 0.3453 -13.0%2017 2018 $2,552,428,472 12.5% $1,012,891 0.0% 0.0% 0.0% $202 $58,383,246 34.4% $26,066 23.1% 0.3968 -11.1%2016 2017 $2,268,242,549 9.4% $1,012,689 0.1% 0.0% 0.0% $1,099 $43,424,220 59.0% $21,183 49.3% 0.4465 -8.5%2015 2016 $2,073,718,709 6.6% $1,011,590 0.1% 0.0% 0.0% $1,304 $27,313,436 -24.0% $14,185 -34.4% 0.4878 -6.1%2014 2015 $1,945,238,643 18.4% $1,010,286 2.2% 2.2% 0.0% $22,016 $35,949,274 5.0% $21,627 -15.9% 0.5194 -13.7%2013 2014 $1,642,587,983 28.7% $988,270 2.9% 2.8% 0.0% $28,069 $34,224,787 377.3% $25,728 379.5% 0.6017 -20.0%2012 2013 $1,276,419,284 0.3% $960,201 0.8% 0.8% 0.0% $7,746 $7,170,917 -39.7% $5,366 -39.6% 0.7523 0.5%2011 2012 $1,272,191,413 0.7% $952,455 0.9% 0.9% 0.0% $8,938 $11,898,453 397.6% $8,884 470.9% 0.7482 0.2%2010 2011 $1,263,612,229 -12.0% $943,517 0.9% 0.0% 1.0% $8,639 $2,390,930 -90.8% $1,556 -88.3% 0.7467 14.7%2009 2010 $1,436,408,659 -19.6% $934,878 2.7% 1.7% 1.0% $24,205 $25,970,254 -38.8% $13,244 -39.7% 0.6508 27.6%2008 2009 $1,785,823,913 13.2% $910,673 11.5% 2.9% 8.6% $94,045 $42,405,501 26.9% $21,948 7.6% 0.5100 -1.5%2007 2008 $1,577,868,490 21.0% $816,628 2.6% 2.6% 0.0% $20,597 $33,423,790 1.6% $20,407 -5.8% 0.5176 -15.2%2006 2007 $1,303,791,031 11.3% $796,031 3.1% 3.1% 0.0% $23,753 $32,896,919 46.7% $21,673 36.7% 0.6106 -6.3%2005 2006 $1,171,283,570 9.6% $772,278 2.3% 2.3% 0.0% $16,997 $22,426,823 -5.8% $15,856 -10.1% 0.6514 -7.9%2004 2005 $1,068,312,122 7.5% $755,281 2.6% 2.6% 0.0% $19,109 $23,804,320 28.3% $17,627 28.8% 0.7070 -4.5%

5 - Year Annual Avgs: 12.4% 0.5% 0.4% 0.0% $5,146 $47,563,669 $22,465 0.439115-Year Annual Avgs: 8.2% 2.2% 1.5% 0.7% $18,522 $31,628,736 $17,641 0.5795

* Not Yet Certified Information

Historical InformationProperty Tax & Related Information

For the City of Clyde Hill

New ConstructionTotal CityTotal City Total City

Sales Tax Fund: General (Unrestricted) Category: Business Taxes BARS Number: 001.313.10.00.00

ACTUAL

ACTUAL ACTUAL ACTUAL BUDGET Estimated

YEAR END Draft

BUDGET 2014 2015 2016 2017 2018 2018 2019

565,609 406,142 482,343 588,669 590,000 725,000 850,000

Forecast Notes: Clyde Hill receives 0.85% of the 10.0% sales tax paid for goods and services subject to sales tax within the City’s jurisdictional control. The following information was taken into consideration:

• 2019 Sales Tax from the volatile construction activity component is expected to be $262,472 or 30.9% of the total sales tax.

• 2019 “Base” sales tax (everything except construction) forecasts at $194,100, which is the average of the past five years.

• 2019 school construction sales tax include: o Clyde Hill Elementary Project at $320,571 o Bellevue Christian School at $72,857

• In June 2018, the US Supreme Court ruled that states may collect sales tax from internet sales. The impact of that ruling remains unclear and may expand the city’s sales tax base.

• The Streamlined Sales Tax Law in Washington changed from an origin-based system for local retail sales tax to a destination-based system effective July 1, 2008 with a definite benefit to Clyde Hill.

Data - Revenue Amounts Clyde Hill, Washington August 31, 2018

Sales tax data for budget monitoring and revenue forecasting.

2017 Sales Tax Revenue (Budget) 2017 Sales Tax Revenue (Estimated) 2017 Sales Tax Revenue (Actual)

Base (2013-15, 3 year average is $171,836) 205,000$ Base 244,862$ Base 236,541$

New Construction (based on 56.4% of non-schools) 265,000 New Construction (based on 56.7% of non-schools) 320,639 New Construction 352,128

Sales Tax from Any School Project - Sales Tax from Any School Project - Sales Tax from Any School Project - Total 470,000$ Total 565,500$ Total 588,669$

2018 Sales Tax Revenue (Budget) 2018 Sales Tax Revenue (Projected) 2018 Sales Tax Revenue (Actual)

Base (2014-16, 3 year average is $194,835) 215,350$ Base (based on YTD + $19.5k avg for 4 mo's) 244,071$ Base Not Yet

New Construction (based on 57% of non-schools) 285,450 New Construction (based on YTD + $30k avg for 4 mo's) 395,569 New Construction Not Yet

Sales Tax from Clyde Hill Elementary School Project 89,200 Sales Tax from Clyde Hill Elem Schl Proj (3 mo's, incl strike) 87,429 Sales Tax from Clyde Hill Elementary School Project Not YetTotal 590,000$ Total 727,069$ Total -$

2019 Sales Tax Revenue (Budget)

Base (2013-17, 5 yr avg. Everything but constr & schools) 194,100$ Contract Value 48,000,000$ 2018 87,429$ Contract Value $40,000,000 2019 72,857$

New Construction (2013-17, 5 yr approx avg. all but schools) 262,472 City Tax Rate 0.850% 2019 320,571 City Tax Rate 0.850% 2020 267,143 Sales Tax from CHE & BCS School Projects 393,428 Projected Receipt 408,000$ 2020 - Projected Receipt 340,000$ 2021 -

Total 850,000$ Total 408,000$ Total 340,000$

Sales Tax from Clyde Hill Elementary School Project (2019 Budget) Sales Tax from Bellevue Christian School Project (2019 Budget)

Electricity Utility Tax Fund: General (Unrestricted) Category: Business Taxes BARS Number: 001.316.41.00.00


YEAR END Draft

BUDGET 2014 2015 2016 2017 2018 2018 2019

128,638 131,315 141,590 143,491 145,000 141,900 147,000

Forecast Notes: This is a “revenue based” tax of 6% on the gross revenue earned by Puget Sound Energy (PSE) for using the City’s right of way (ROW) to provide electricity services within the City. The following information was taken into consideration:

• On October 1, 2018, PSE intended to implement a slight adjustment to electrical rates that would generally reduce rates. This rate adjustment was intended to offset the actual costs of the low-income bill assistance program.

• On May 1, 2018, the WUTC approved a rate reduction resulting in the return of millions of dollars to PSE electric customers.

• PSE is moving towards “Decoupling” which is a mechanism under which utility revenues are “decoupled” from sales. The utility’s recovery of fixed costs will not depend on the volume of its energy sales. Instead, revenue is determined on a per-customer basis, thereby removing the company’s financial disincentive to invest in conservation and energy efficiency.

Natural Gas Utility Tax Fund: General (Unrestricted) Category: Business Taxes BARS Number: 001.316.43.00.00


YEAR END Draft

BUDGET 2014 2015 2016 2017 2018 2018 2019

99,277 87,111 80,918 80,918 93,000 87,775 91,000

Forecast Notes: This is a “revenue based” tax of 6% on the gross revenue earned by Puget Sound Energy (PSE) for use of the City’s right of ways (ROW) to provide natural gas services within the City. The primary considerations for projecting next year’s revenue from this source include:

• Puget Sound Energy (PSE) filed 2 requests 9/17/2018 with the state Utilities and Transportation Commission (UTC) proposing an overall average 10.2% decrease for all gas customers, effective 11/1/2018.

• Purchased Gas Adjustment (PGA): PSE has requested to decrease natural gas bills by an overall average of 3.3% under the PGA rate-setting mechanism, which allows utilities to adjust rates, up or down, to reflect fluctuations in the price of natural gas in the wholesale market. PSE is not allowed to profit on the natural gas it purchases for customers.

• Cost Recovery Mechanism for Pipeline Replacement (CRM): PSE has asked the state WUTC to increase gas rates 0.47% to recover costs for the replacement of aging natural gas pipes.

Solid Waste Utility Tax Fund: General (Unrestricted) Category: Business Taxes BARS Number: 001.316.45.00.00


YEAR END Draft

BUDGET 2014 2015 2016 2017 2018 2018 2019

19,491 22,056 23,373 25,292 25,500 24,300 25,500

Forecast Notes: This is a “revenue based” tax of 4% on the gross revenue earned by Republic Services (formerly Allied Waste Services of Bellevue) for providing recycling, yard debris, and garbage collection services within the City. The following information was taken into consideration:

• New solid waste hauling contract started April 1, 2015 with a number of changes on how services are provided (i.e. garbage, recycling and organics are picked up weekly (organics bi –weekly during the winter months December – February).

• 2019 rates have not yet been set. The King County “tipping fee” (aka disposal fee) increases by approximately 5%.

• Per Republic Services, tipping fees for solid waste, recycling and yard waste added together represents approximately 1/3 of the bill paid by Clyde Hill residents for this utility service.

Cable TV Utility Tax Fund: General (Unrestricted) Category: Business Taxes BARS Number: 001.316.46.00.00


YEAR END Draft

BUDGET 2014 2015 2016 2017 2018 2018 2019

118,639 124,791 123,574 123,063 125,000 115,500 119,600

Forecast Notes: This is a “revenue based” tax of 9% on the gross revenue earned by Comcast for providing cable TV services (not on internet) within the City. The following information was considered:

• Effective on July 1, 2009, the utility tax rate was increased from 4% to 9% to help reduce the projected deficit caused by the “Great Recession” (the utility tax rate was 10% from 1988 through 2004 with a reduction down to 4% in 2005 made possible by the surge in development revenues).

• Last known rate increase by Comcast was dated April 29, 2016 for July 1, 2016.

• This revenue source could involve customers “cutting the cord” and getting their entertainment via the internet. It appears that the trend for premium services from Comcast TV has flattened out.

Telephone Local Access Utility Tax Fund: General (Unrestricted) Category: Business Taxes BARS Number: 001.316.47.10.00


YEAR END Draft

BUDGET 2014 2015 2016 2017 2018 2018 2019

23,188 22,644 24,490 18,966 19,000 20,000 19,000

Forecast Notes: This is a “revenue based” tax of 6% on the gross revenue earned by various telecommunication companies for use of the City’s right of way to provide local access telephone services (i.e. CenturyLink & VoIP providers) within the City. The following information was taken into consideration:

• The utility tax rate for this revenue category was reduced to 4% from 2006 to 2008 (allowed by a surge in development revenues), but then increased back up to 6% in 2009 to help resolve the projected budget deficit brought on by the “Great Recession.”

• Comcast’s VoIP telephone service is a noteworthy trend that started at the beginning of 2007 with a monthly remittance of under $100 and now remittances are over $800 per month (VoIP service most likely off-sets some City tax revenues by residents giving up their land lines for VoIP).

• There are numerous telecom companies remitting some amount of utility tax to the City of Clyde Hill. Century Link and Comcast represent over 90% of the total remittances.

Wireless Telephone Utility Tax Fund: General (Unrestricted) Category: Business Taxes BARS Number: 001.316.47.12.00


YEAR END Draft

BUDGET 2014 2015 2016 2017 2018 2018 2019

61,410 58,726 46,464 45,370 50,000 42,500 40,000

Forecast Notes: This is a “revenue based” tax of 6% on the gross revenue earned by various telecommunication companies that provide wireless telephone services within the City. The following information was considered:

• The utility tax rate for this revenue category has been 6% from its inception in 1995.

• This revenue source peaked in 2009 at $79,069 and has declined approximately 46% to the 2018 projected year-end (other cities report this same downward trend).

CITY OF CLYDE HILL 2019 BUDGET

ACCOUNT NAME:

LEASEHOLD EXCISE TAX

_____________________________________ REVENUE ITEM FUND: GENERAL CATEGORY: EXCISE TAXES BARS#: 001.317.20.00 ____________________________________

ACTUAL ACTUAL ACTUAL ACTUAL BUDGET Estimated YEAR END

Draft BUDGET

2014 2015 2016 2017 2018 2018 2019

357 360 464 505 400 375 400

Forecast Notes: The City is required to remit to the State a leasehold excise tax equal to 0.1284% for any leases or rents it collects on property that is exempt from property tax. In Clyde Hill, this represents the rental house. This revenue source comes from the State in an amount equal to 31% of the leasehold excise tax remitted to the State by the City for the rental house (State keeps 54% and County gets 15%). The wireless communication facilities located in Clyde Hill used to pay leasehold excise tax until a change in tax law interpretation by the Department of Revenue. In theory, the telecommunication companies with wireless communication facilities in Clyde Hill are assessed property tax and help pay part of the City’s annual levy amount. The Department of Revenue actually audited the City for leasehold excise tax in 2016 and with one small exception, the City passed the audit unscathed.


ACCOUNT NAME:

Business Licenses (Formerly HOME OCCUPATION PERMITS)

_____________________________________ REVENUE ITEM FUND: GENERAL CATEGORY: BUSINESS LICENSES AND PERMITS BARS#: 001.321.90.00 ____________________________________


Draft BUDGET

2014 2015 2016 2017 2018 2018 2019

21,740 22,590 21,337 22,883 23,000 22,250 23,000

Forecast Notes: Business licensing started in Clyde Hill on April 1, 2010 as a way to better inform businesses to pay their sales tax to the City of Clyde Hill when doing business in the City. Prior to city business licenses, some businesses appeared to be confused about what jurisdiction to remit their collected sales taxes to (the City of Bellevue usually benefitted from the confusion). As a cost saving measure for the State, the State Department of Revenue took over to facilitate this program from the Department of Licensing in early 2011. The City still maintains control over the program by approving each individual license application. The City’s Ordinance to enact the business licensing requirement has exemptions such as non-profits, casual sales, babysitting, etc. There are approximately 900 businesses with a license to conduct business in the City of Clyde Hill (fee is $25 annually). Business licensing is also designed to control parking and noise issues for residents conducting business from their homes. Surprisingly, there are well over 100 businesses in Clyde Hill operating from their home.

Solid Waste Franchise Fees Fund: General (Unrestricted) Category: Business Taxes BARS Number: 001.321.91.45.00


YEAR END Draft

BUDGET 2014 2015 2016 2017 2018 2018 2019

26,800 30,326 32,138 34,776 36,000 34,350 36,000

Forecast Notes: This is a “revenue based” franchise fee of 5.5% on the gross revenue earned by Republic Services (formerly Allied Waste Services of Bellevue) for the right to provide recycling, yard debris, and garbage collection services within the City. The following information was taken into consideration:

• Solid waste hauling contract started April 1, 2015 with a number of changes on how services are provided (i.e. garbage, recycling and organics are picked up weekly (organics bi –weekly during the winter months December – February).

• 2019 rates have not yet been set. The King County “tipping fee” (aka disposal fee) increases by approximately 5%.

• Per Republic Services, tipping fees for solid waste, recycling and yard waste added together represents approximately 1/3 of the bill paid by Clyde Hill residents for this utility service.

Cable TV Franchise Fees Fund: General (Unrestricted) Category: Business Taxes BARS Number: 001.321.91.46.00


YEAR END Draft

BUDGET 2014 2015 2016 2017 2018 2018 2019

65,911 69,328 68,652 68,388 69,000 64,750 67,000

Forecast Notes: This is a “revenue based” tax of 5% on the gross revenue earned by Comcast for providing cable TV services (not internet) within the City. The following information was considered:

• The franchise fee has been 5.0% since 1988 and started at 3.0% in Mar’79. • The Internet Tax Freedom Act became permanent law when President Obama signed the Trade

Facilitation and Trade Enforcement Act of 2015 (Pub.L. 114–125) on February 24, 2016.

https://en.wikipedia.org/wiki/Barack_Obama

https://en.wikipedia.org/w/index.php?title=Trade_Facilitation_and_Trade_Enforcement_Act_of_2015&action=edit&redlink=1

https://en.wikipedia.org/w/index.php?title=Trade_Facilitation_and_Trade_Enforcement_Act_of_2015&action=edit&redlink=1

http://legislink.org/us/pl-114-125

Water Franchise Fees Fund: General (Unrestricted) Category: Business Taxes BARS Number: 001.321.91.52.00


YEAR END Draft

BUDGET 2014 2015 2016 2017 2018 2018 2019

113,635 150,449 140,538 148,763 150,000 165,000 150,000

Forecast Notes: This is a “revenue based” tax of 9% on the gross revenue earned by the City of Bellevue Utilities Department to use the City’s right of way while providing water services within the City. The following information was taken into consideration:

• Per the City of Bellevue Utilities on 10/12/18, the proposed Water rate increases for 2019 & 2020 are 3.7% and 5% respectively. Rates increase proposals go to Bellevue City Council in early December.

• Bellevue Utilities purchases their water from the Cascade Water Alliance (formed in 1999, currently a municipal corporation comprised of five cities and 2 water districts serving over 350,000 residents).

Sewer Franchise Fees Fund: General (Unrestricted) Category: Business Taxes BARS Number: 001.321.91.54.00


YEAR END Draft

BUDGET 2014 2015 2016 2017 2018 2018 2019

84 84 83,534 89,015 91,499 95,281 95,000 96,500 95,000

Forecast Notes: This is a “revenue based” tax of 9% on the gross revenue earned by the City of Bellevue Utilities Department to use the City’s right of way while providing sanitary sewer services within the City. The following information was taken into consideration:

• Per the City of Bellevue Utilities on 10/12/18, the proposed Sewer rate increases for 2019 & 2020 are 3.9% and 2.3% respectively. Rates increase proposals go to Bellevue City Council in early December.

• Metro’s regional wastewater treatment program costs increase in odd number years and represents approximately 60% of the costs for Bellevue Utilities to provide wastewater sewer services.

• Residential sewer bills are tied to your “average winter volume” (your 3 bills received between Dec. 15 to June 15) to avoid charging customers for water used during summer for irrigation.

Building Permit Fees Fund: General (Unrestricted) Category: Non- Business Taxes BARS Number: 001.322.10.00.00


YEAR END Draft

BUDGET 2014 2015 2016 2017 2018 2018 2019

216,018 439,006 495,554 779,880 750,000 850,000 750,000

Forecast Notes:

This revenue source represents the permit fee collected to build a new home, school or remodeling project based on the valuation dollar amount of the project. The following information was considered:

• This volatile revenue category has always been forecasted by the City in a conservative way. For 2019, Clyde Hill new home development activity is forecasted to continue the robust pace experienced from 2015 through so far in 2018 with 16 new homes and 49 remodeling projects permitted. New construction valuation in 2019 is projected to be $40,100,000.

• Bellevue Christian School is expected to apply for a building permit in 2019 to completely rebuild Clyde Hill Elementary School. Project valuation is estimated at $40,000,000.

• From the start of 2015 through the 2018 estimated year-end, Clyde Hill has averaged 19 new homes each year with a $38,883,157 valuation. Permit fees are based on the project valuation amount.

Development Revenues (Residential History Only - No Schools)2019 Budget Development Process (As of 09/20/2018)

# Of Permit $ # Of Permit $ # Of Permit $ # Of Permit $Permits Value Generated Permits Value Generated Permits Value Generated Permits Value Generated

Per Permit Per Permit Per Permit Per PermitBuildings - New 8 $13,451,895 $1,681,487 17 $35,113,225 $2,065,484 19 $36,001,520 $1,894,817 22 $45,668,555 $2,075,843

Buildings - Remodel 58 $4,734,730 $81,633 48 $6,763,453 $140,905 52 $5,561,385 $106,950 47 $10,296,565 $219,076$18,186,625 $41,876,678 $41,562,905 $55,965,120

Plan Check Fees: $112,546 $290,396 $333,147 $363,815Building Permits: $216,018 $439,006 $495,554 $779,880

Mechanical 73 Per Permit 92 Per Permit 95 Per Permit 88 Per PermitStreet Opening 55 $252 59 $368 93 $387 94 $342

Demolition 12 21 20 28Original Grade 24 24 40 15Other Permits* 81 66 71 130

Total: 221 262 319 355

Other Permits: $55,657 $96,532 $123,509 $121,259

# Of Permit $ # Of Permit $ # Of Permit $ # Of Permit ProjectedPermits Value Generated Permits Value Generated Permits Value Generated Permits Value Budget

Per Permit Per Permit Per Permit Per PermitBuildings - New 17 $38,749,328 $2,279,372 12 $26,400,000 $2,200,000 16 $35,200,000 $2,200,000 20 $44,000,000 $2,200,000

Buildings - Remodel 40 $5,820,461 $99,013 37 $3,675,000 $100,000 49 $4,900,000 $100,000 61 $6,125,000 $100,000$44,569,789 $30,075,000 $40,100,000 $50,125,000

Plan Check Fees: CHES/BCS 314,065 $196,783 $150,000 BCS School 225,000 $200,000 $250,000Building Permits: CHES 412,061 $489,718 $303,750 345,000 $405,000 $506,250

Mechanical 94 Per Permit 63 Per Permit 85 Per Permit 106 Per PermitStreet Opening 69 $481 47 $367 62 $367 78 $367

Demolition 16 11 14 18Original Grade 20 14 18 23Other Permits 104 70 94 117

Total: 303 205 273 341

Other Permits: CHES 20,013 $145,847 $75,000 25,000 $100,000 $125,000

Actual 2017

2019 High Projection (125%)

Actual 2014 Actual 2015 Actual 2016

Estimated 2018 2019 Low Projection (75%) 2019 Draft Budget

0

5

10

15

20

25

1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 '18 E'19 DraftNew Homes 9 16 14 10 16 12 16 18 15 16 7 2 6 10 9 12 8 18 20 24 17 16

New Homes Since 1998

0

20

40

60

80

100

120

140

160

1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 '18 E'19 DraftRemodels 102 142 102 85 78 99 57 57 61 62 69 55 65 75 77 57 62 44 42 47 40 49

Remodels Since 1998

0

5

10

15

20

25

30

1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 '18 E '19 DraftDemos 8 13 11 12 17 12 14 20 17 19 10 1 7 10 15 10 12 21 20 29 16 14

Demos Since 1998

Other Non-Business Permit Fees Fund: General (Unrestricted) Category: Licenses & Permits BARS Number: 001.322.90.00.00


YEAR END Draft

BUDGET 2014 2015 2016 2017 2018 2018 2019

55,657 96,489 123,509 121,059 120,000 165,000 125,000

Forecast Notes: This revenue source represents the permit fees collected by the City for permitting street openings, public place use, drainage, fire sprinkler, demolitions, mechanicals, over-length vehicle permits, and other mostly construction related permits. A significant change in this revenue source starting in 2009 has been for Street Opening Permits. If the City’s capital asset (i.e. paved street) has to be cut open to provide utility services to a homeowner, the permit fee assesses a pavement intrusion fee starting at $750 and then $100 per sq. ft. for cuts greater than 15 sq. ft. or 10 lineal ft. For intrusions into pavement less than two years old, the intrusion fee is tripled. In general, the City’s fee resolution allows the City to recover from the applicant any and all costs and expenses incurred by the City related to the application, including, outside consultants and attorney’s fees. This revenue source should parallel the forecast for new home construction in 2019. The Bellevue Christian School Project starting in 2019 could have some impact on this revenue category.


ACCOUNT NAME:

WASHINGTON TRAFFIC SAFETY COMMISSION GRANT

_____________________________________ REVENUE ITEM FUND: GENERAL CATEGORY: INTERGOVERNMENTAL REVENUE BARS#: 001.333.20.61 ____________________________________


Draft BUDGET

2014 2015 2016 2017 2018 2018 2019

2,836 2,857 0 0 0 0 0

Forecast Notes: This revenue category represents federal grant money received indirectly through the Washington Traffic Safety Commission. Clyde Hill Officers work designated “emphasis patrols” on overtime and the City is reimbursed for their direct payroll costs. This State program is expected to continue in 2019 although Clyde Hill has not participated the last few years due to manpower issues.

State-Shared Transportation Revenue - MVFT & Multi-modal Fund: General (Unrestricted) Category: Intergovernmental BARS Number: 001.336...87 & 71


YEAR END Draft

BUDGET 2014 2015 2016 2017 2018 2018 2019

61,471 63,111 68,284 69,487 70,000 71,050 71,200

Forecast Notes: Clyde Hill receives three separate transportation distributions. The first is the Motor Vehicle Fuel Tax (MVFT), which is distributed as a percentage of the total fuel taxes collected statewide. The other two, the “increased motor vehicle fuel tax” and “Multi-Modal” distributions, were created in 2015 by 2ESSB 5987 and consist of direct transfers from the state transportation fund, hence allocations are not impacted by actual fuel tax collections. MVFT and increased MVFT distributions must be used for highway purposes, while the multi-modal funds may be used for any transportation purpose. The Municipal Research and Service Center (MRSC) provides us with a projection based on how much State gas tax revenue they expect to be collected and then it is distributed to cities based on population. The formula for 2019 is ($23.32 x 3,045 = $71,009). MVFT is based on number of gallons sold. Washington state gas tax is 3rd highest in the nation at $.494/gallon (behind PA and CA). When combined with the Federal rate/gallon it totals $.678/gallon.

Liquor Excise Tax Fund: General (Unrestricted) Category: Intergovernmental BARS Number: 001.336.06.94.00


YEAR END Draft

BUDGET 2014 2015 2016 2017 2018 2018 2019

5,600 8,154 14,090 14,750 15,000 14,200 15,000

Forecast Notes: Much has changed on the liquor revenue scene since Initiative 1183 was approved by voters in November 2011. It privatized the distribution and retail sale of liquor, effective June 1, 2012. The markups on liquor have been replaced as a state revenue source by license fees that are paid to the state by retailers and distributors. 35% of liquor excise tax collected at the point of sale is deposited in the “liquor excise tax fund” for distribution to cities, towns and counties. $10 million a year is diverted from this fund to the state general fund. Of the remaining amount, 80% is distributed to cities and towns based on population while the remaining 20% goes to counties based on population. Determining the 2018 draft budget is simply multiplying the MRSC’s estimate by the State Office of Financial Management’s April, 2018 population estimate: $5.14 X 3,045 = $15,651.

Liquor Control Board Profits Fund: General (Unrestricted) Category: Intergovernmental BARS Number: 001.336.06.95.00


YEAR END Draft

BUDGET 2014 2015 2016 2017 2018 2018 2019

26,478 26,243 26,015 25,835 25,000 25,500 25,000

Forecast Notes: This revenue source has stabilized, but has remained flat since the voters approved Initiative 1183 in November 2011 to end the State’s monopoly on liquor sales. This revenue can still be used for general government purposes. We are following the Municipal Research and Service Center’s (MRSC) “2019 Budget Suggestions” booklet for guidance (liquor revenues are distributed to cities based on population).

• Under Initiative 1183, the State is now collecting revenue in the form of license fees from distributors and retailers but is still calling these revenues “liquor profits.”

• The 2019 Draft Budget number was derived by following the MRSC’s guidance of $8.16 per capita multiplied by the April 2018 population estimate in Clyde Hill per the State Office of Financial Management (OFM) equals $24,847 (i.e. “no less than before” per the initiative).

Yarrow Point Police Services Contract Fund: General (Unrestricted) Category: Intergovernmental BARS Number: 001.338.21.00.00


YEAR END Draft

BUDGET 2014 2015 2016 2017 2018 2018 2019

386,461 380,233 414,400 414,556 421,000 420,900 435,900

Forecast Notes: Per contractual agreement through 2019, the Town of Yarrow Point shares 25% of the cost of providing a 24 X 7 fully-trained and equipped police department for the benefit of both communities:

2019 Base Service Fee $ 393,483 Other Direct Costs (e.g. dispatch, prosecutor, etc.) $ 58,413 Total $ 451,896 General Fund $ 435,896 Criminal Justice Dept. $ 16,000

• Criminal Justice Dept is part of the Projects Fund and is used to account for restricted funds.

• Total Fee Calculation is up $15,363 or 3.5% from 2018 to 2019 Budget.

CITY OF CLYDE HILL

2019 BUDGET

ACCOUNT NAME:

ZONING & SUBDIVISION FEES

_____________________________________ REVENUE ITEM FUND: GENERAL CATEGORY: ECONOMIC ENVIRONMENT BARS#: 001.345.81.00 ____________________________________


Draft BUDGET

2014 2015 2016 2017 2018 2018 2019 2014 2015 2016 2017 2017 2018 8,987 15,804 16,975 12,550 10,000 10,500 10,000

Forecast Notes: This revenue category represents processing fees for variance / subdivision applications, SEPA reviews and original grade determinations. Forecasted revenues are tied to the level of housing development activities. Fees for conducting Tree View Hearings and any reimbursed expenditures paid by homeowners to the City are recorded in this account as revenue (the State Auditor’s Office does not allow the City to net reimbursements from homeowners against City expenditures).

Plan Check Fees Fund: General (Unrestricted) Category: Charge for Services BARS Number: 001.345.83.00.00


YEAR END Draft

BUDGET 2014 2015 2016 2017 2018 2018 2019

112,546 290,396 333,147 364,215 400,000 510,000 425,000

Forecast Notes: This revenue category represents a fee charged for the city hall front counter assistance to apply, the plan review for code compliance and the drainage plan review before issuing a building permit. The project valuation determined by the City’s Building Official sets the fee amount. The following was considered:

• Sixteen (16) new home projects at an average valuation of $2,200,000 each are planned for in 2019 with another 49 remodeling projects valued at $4,900,000 (remodeling projects represent 12.2% of the $40,100,000 total valuation amount for new construction expected in 2019).

• Original Grade Permits are viewed as a “bow wave” indicator for higher valuation construction projects. The City has averaged 26 permits per year over the past 4 years (i.e. 2014 through 2017).

• Strong home sales activity in Clyde Hill is a good indicator of future building activity involving “teardowns” and “spec homes”. 84 homes have been sold in Clyde Hill over the previous 12 months as of the end of September 2018 compared to 79 homes sold as of September 2017.

Traffic Fines & Penalties Fund: General (Unrestricted) Category: Fines & Forfeits BARS Number: 001.353.10.00.00


YEAR END Draft

BUDGET 2014 2015 2016 2017 2018 2018 2019

55,892 90,437 57,287 51,291 55,000 34,700 50,000

Forecast Notes: This revenue category represents the City’s share of revenue received monthly from Kirkland Municipal Court for processing cases filed by the Police Department. In municipal courts, parking fines are 100% local revenue. All other fines, forfeitures and penalties assessed are subject to a 70% surcharge; the city’s share is 68% of the total fine and surcharge; the remaining 32% is remitted to the state (RCW 3.62.090(1)). Note that 1.75% of the local portion must be remitted to the county for crime victim and witness programs. The City of Clyde Hill records all money received from the Kirkland municipal court that are required to be shared with the state or county in a non-revenue account in the city’s Trust & Agency Fund. This money is then remitted to the state or county at the end of each quarter. To a certain extent, the revenue forecast depends on the number of officers who are street ready and working full time. Otherwise, the impact of the traffic speed signs seems to be maintaining overall speed limits within Clyde Hill and has reduced speeding tickets. Municipal Court Operations is one of the indicators included in the annual Dashboard Report as a quick and easy way to monitor this revenue source over the past few years.

9605 NE 24th Street • Clyde Hill, Washington 98004 425-453-7800 • Fax: 425-462-1936 • www.clydehill.org

Police Revenue Summary The “Urban Myth”

Many people like to say that police departments give tickets because they result in a lot of revenue…that’s the myth, especially in Washington State, because the State takes about half of all ticket revenue without compensating for any of the associated cost. Here’s the truth about ticket revenue: Clyde Hill keeps 51% of the revenues collected through court fees and fines. The 51% share kept by the City is used to pay for court related costs. Court revenues do not cover the full cost of court related expenses (filing fees, prosecutor fees, public defender, police officer court time, interpreter fees, etc). The remaining 49% of the revenues collected through court fees and fines are given to the state and county for their use on various programs. The State divides its share of these revenues in approximately the following manner:

• (70.5%) - Public Safety & Education • (17%) - Judicial Information Systems Account • (8%) - EMS & Trauma Care • (3.5%) - School Zone Safety Account • (1%) - Death Investigations Account

http://www.clydehill.org/


ACCOUNT NAME:

MISC. FINES & PENALTIES

_____________________________________ REVENUE ITEM FUND: GENERAL CATEGORY: MISC. FINES & FORFEITS BARS#: 001.359.90.00.0 ____________________________________


Draft BUDGET

2014 2015 2016 2017 2018 2018 2019

13,380 147,834 83,327 46,755 7,500 0 7,500

Forecast Notes: This revenue category represents fines assessed for: 1) more than one false alarm; 2) civil penalties for building without a permit and plan review; 3) dumping into the City's storm water system; 4) court ordered reimbursement of costs to the City; and 5) in 2015, the late fee penalty from WCF providers. The volatility of this revenue source is evident in the brief history shown above.

Investment Income Fund: General (Unrestricted) Category: Misc. Revenues BARS Number: 001.361.10.00.00


YEAR END Draft

BUDGET 2014 2015 2016 2017 2018 2018 2019

9,105 12,971 35,737 80,865 125,500 157,500 165,000

Forecast Notes: A projected cash flow analysis of investment income supports the development of the 2019 draft budget number of $165,000. This is a very conservative estimate as we expect interest rates to average 2.62% in 2019. Approximately 97% of the City's available financial resources are invested with the Washington State Treasurer's Local Government Investment Pool (LGIP). The LGIP interest rate lags slightly behind movement in the Fed Funds rate set by the Federal Reserve Bank. September 2018 LGIP rate of return was 2.06%. Currently the Fed Funds rate is set at 2.25% with the most recent increase in September 2018. The CBOT/CME (Chicago Board of Trade) Fed Funds Futures Quotes used by the City show the Fed Fund rate at 2.37% in Jan 2019 and 2.82% in Dec 2019. Most Fed officials expect that they will raise interest rates by one percentage point thru next year and at least one more quarter point in 2020. The City has an Investment Committee that is made up of the Mayor, two City Councilmembers, the City Administrator (aka Clerk/Treasurer), and the Finance Manager. The Investment Committee is responsible for periodically reviewing investment performance, ensuring compliance with the City Investment Policy (certified by the Washington State Municipal Treasurer’s Association), and to make recommendations to the City’s Clerk/Treasurer (City Administrator) of suitable investment opportunities.


ACCOUNT NAME:

SALES TAX INTEREST

_____________________________________ REVENUE ITEM FUND: GENERAL CATEGORY: INTEREST AND EARNINGS BARS#: 001.361.40.00 ____________________________________


Draft BUDGET

2014 2015 2016 2017 2018 2018 2019

125 199 334 524 500 500 500

Forecast Notes: This revenue category represents the interest earned on the City’s allocation of sales tax revenues while held for transmittal by the State Treasurer. The 2019 Budget amount is based on past history and current interest rates.

Wireless Communication Facility Leases Fund: General (Unrestricted) Category: Misc. Revenues BARS Number: 001.362.50.00.00


YEAR END Draft

BUDGET 2014 2015 2016 2017 2018 2018 2019

112,700 272,853 230,235 213,362 222,125 222,100 231,300

Forecast Notes: This revenue category represents the annual application fees and rent charged to various telecommunication companies for using the City’s wireless communication facilities (i.e. water tower and right-of-way). For 2019, the City will have 6 wireless facility leases and 2 right of way leases. In 2015, Sprint paid their 2014 rent late in the amount of $111,073 and in 2016, AT&T Mobility paid their 2015 rent late in the amount of $34,386. This caused problems with projected year-end numbers for both 2014 and 2015. The upside to these late rental payments is the substantial penalty received from both telecommunication companies in the total amount of $145,459 over the past few years (FYI – late fees were recorded in the Misc. Fines & Penalties Account). Clearwire cancelled their lease agreement at the end of 2016.


ACCOUNT NAME:

SALE OF SURPLUS PROPERTY

_____________________________________ REVENUE ITEM FUND: GENERAL CATEGORY: OTHER BARS#: 001.369.20.00 ____________________________________


Draft BUDGET

2014 2015 2016 2017 2018 2018 2019

7,129 3,629 21,284 3,593 25,000 41,200 3,500

Forecast Notes: This revenue category represents the net proceeds from the sale of any surplus property approved for sale by the City Council. This revenue source is primarily the result of selling surplus Police Department vehicles and an occasional Public Works truck that generally follows the Equipment Replacement Schedule. In 2019, the City does not plan to surplus any large pieces of equipment or vehicles.

Miscellaneous Operating Revenue Fund: General (Unrestricted) Category: Misc. Revenues BARS Number: 001.369.90.00.00


YEAR END Draft

BUDGET 2014 2015 2016 2017 2018 2018 2019

31,042 51,434 46,477 24,623 15,000 61,200 18,500

Forecast Notes: This revenue category represents money received for miscellaneous items such as surplus property, concealed weapon permits, solicitor fees, maps, passport fees, copying charges and fingerprinting services. Reimbursement for damaged City property is recorded here along with any money received not otherwise defined in the budget.

• 2018 Estimated Year End includes the sale of Public Works vehicles and mowers for $41,208. Twenty five percent (25%) of any revenue from the sale of surplus police vehicles is shared with Yarrow Point per the police contract ($0 predicted in 2018).

• Passport applications are processed at the City Hall front counter for a $25 fee. However, to

facilitate workflow for City Staff, passport application hours were restricted starting in early 2016. Revenue from this source has gone down noticeably as a result.

Documents

DRAFT 2019 BUDGET GENERAL FUND REVENUE