Kirkland staff warn of smaller surpluses, project $9.5M ongoing gap for 2027–28; propose mid‑biennium service packages

City finance staff presented an updated mid‑biennium financial forecast on Nov. 5 that shows revenues remaining positive in 2025–26 but at a smaller surplus than in recent years, and a projected ongoing gap of roughly $9.5 million for the 2027–28 biennium if no policy changes are made.

Kevin Pestring, the city’s financial planning manager, told council the city is seeing “personnel savings” and higher investment interest in 2025, but that retail sales tax, revenue‑generating regulatory license (RGRL) fees and construction activity have slowed compared with the extraordinary surpluses that helped pay for one‑time investments in prior cycles. "Starting with retail sales tax ... retail sales tax is relatively flat from 2024," Pestring said, noting a regional pattern of flat or below‑budget sales tax collections.

Key takeaways and drivers: - Personnel and retirement contribution savings: Staff expects personnel expenditures to be…