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Finance director reports stronger‑than‑budgeted 2024 revenue; council warned of potential near‑term headwinds
Summary
Finance Director Linda Merrill reported Kenmore ended 2024 with revenues above budget, lower overall expenditures and a strong fund balance, while cautioning about several near‑term revenue risks and large capital needs.
Finance Administration Director Linda Merrill presented Kenmore’s fourth quarter and year‑end 2024 financial report and highlighted revenue performance, expenditures, reserves and investment holdings.
Highlights: the city’s amended biennial revenue budget (~$32.9 million) was outperformed with actual revenues of about $35.4 million (roughly 7% above budget) driven by higher other taxes (business & occupation, cannabis), development fees and investment interest. Expenditures for the biennium were about $29.4 million against an amended budget of roughly $33.4 million; some underspending reflected vacancies and use of ARPA funds to offset public safety costs in 2023. The general fund ended the year with an actual fund balance of about $9.6 million (well above a required 20% operating reserve target cited by staff).
Investment posture: the city’s portfolio included both liquid LGIP funds (earning around 4.3% at the time of reporting) and longer‑term bond investments (average yield ~3.6%). Bond proceeds received late in the year produced a larger cash balance headed into 2025 and both LGIP positioning and laddered securities will be monitored as interest rates change.
Fund‑level notes: the Transportation Benefit District and REET collections will be watched closely; the street fund depends materially on fuel tax and car‑tab revenues. The new photo enforcement (CAEP) program generated about $921,000 in receipts since implementation; staff transferred portions into transportation capital. Surface‑water and impact‑fee funds show balances to support planned capital work; the city will continue to monitor timing of expenditures as projects move into construction.
Risks and next steps: Merrill warned of possible revenue headwinds from reduced REET/development activity, lower fuel tax receipts and broader economic pressures that could affect permit revenue and investment income as interest rates change. She noted the Public Works Operations Center is an upcoming large capital program with costs estimated under earlier assumptions and flagged the need to revisit forecasts and capital estimates. Council members asked staff to continue frequent financial updates.
