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Kennewick council reviews capital improvement funding as convention center moves forward
Summary
City staff told the Kennewick City Council on Feb. 25 that the cityhas built capital reserves and expects roughly $87 million in tax revenues for the CIP over six years, while noting $21 million in planned contributions to the convention center expansion and carryovers that will affect 2025 balances.
Kennewick City Council members heard a financial briefing on capital project funding during a Feb. 25 workshop as the city prepares to move from planning to design and funding on post-convention-center priorities.
The briefing, led by finance staff Jessica Platt, outlined revenue sources and projected uses for the city—s capital improvement program (CIP), and flagged planned contributions to the convention center expansion that will draw on reserve balances.
Platt said the city—s CIP receives revenue from taxes, state and federal grants, transportation and park impact fees, a new transportation benefit district sales tax, and miscellaneous revenues such as investment interest and rental income. "We are anticipating over the next six years collecting about $87,000,000 into the CIP for tax revenues," Platt said.
Why it matters: council must set priorities for projects after the convention center, and the CIP briefing framed what is currently affordable without new revenue sources. Staff emphasized that carryovers from 2024 and planned convention center contributions will lower reserves in the near term.
Key takeaways
- Convention center contribution: City Manager Erin Erdman and Platt told council the city has agreed to contribute $21,000,000 toward the convention center expansion; $8,000,000 of that was budgeted in 2024 for long-lead items and $9,000,000 is shown in the CIP fund for 2025. Staff said an additional $4,000,000 is anticipated to come from a combination of CIP, lodging tax, or the general fund.
- Fund balance and carryovers: Platt said the city—s estimated 2024 ending fund balance is about $24,000,000, but staff are closing the books and expect carryover projects (including the convention center expansion) to be brought back to council for approval in spring.
- Major revenue drivers: Platt identified the optional portion of local sales tax, real estate excise tax, utility taxes (including 4% of the water and wastewater utility tax that helps pay debt service on some fire stations), and localized programs such as the South Ridge local revitalization financing (LRF) that supports Bob Olsen Parkway debt.
- Uses: transportation projects, pavement preservation (including funding from the new transportation benefit district sales tax), debt service, city facilities maintenance and a small partnership contribution for the Vista District commons were listed as primary uses.
Council questions and context
Council members asked staff for clarifications on projections, including a specific dip in the real estate excise tax projection in later years; Platt said the assumption generally uses 3% annual growth for sales tax and that she would review that particular number. Council member Trumbo and others also asked why the fund balance is projected to decline in the 2025-26 biennium; staff confirmed part of that spend-down is tied to the convention center expansion commitments.
No formal actions or votes were taken during the finance briefing; staff said they will return with project carryover requests and more detailed funding plans as accounting closures are completed.
Planned next steps include staff returning to council with carryover items and more granular funding options for the projects that council prioritizes.
