The Strong America Tour is underway this week in Washington State (and a quick jaunt into British Columbia!). As the tour progresses this fall and into 2020, one thing we’ll be doing here is sharing the testimonials of our members who have found the Strong Towns message especially relevant to the place they live and the problems they’re facing.
One such place is Kenmore, Washington, and one such person is Kenmore’s city manager, Rob Karlinsey. Rob has to deal every day with the reality of balancing a budget and delivering the services that Kenmore residents expect from local government—and that means ensuring that as Kenmore grows and evolves, it does so in financially productive ways.
Here’s what Rob told us when we asked him why the Strong Towns messages resonates with him and why it matters for Kenmore. –Strong Towns staff.
Kenmore, Washington, a bedroom community of 23,000 and suburb of Seattle, experienced most of its growth in the 1960s, ‘70s, and ‘80s when the automobile was king. As a result, we’re a city of mostly single family homes with wide, fast streets delivering cars to cul-de-sacs. We recently had a pavement rating report completed for our city streets. While our streets are not in horrible condition yet, the consultant concluded that they’re on the decline and that we need to double our pavement preservation spending to keep our streets from declining further.
To find the money to double our pavement preservation spending, we would have to make significant cuts elsewhere in our budget or increase taxes—a 25% increase in property tax, for example.
Meanwhile, our revenue growth is lackluster, even though we’re part of the roaring Seattle area economy. In fact, our operating revenues are not keeping up with the rising cost of doing status-quo business. A major reason for this problem is the state-imposed 1% limit on property tax growth. As a bedroom community, property tax is by far our largest source of revenue for our operating budget. With voter approval, we can exceed the 1% property tax growth limit, but our residents may not have the appetite for more taxes, due in large part to recent large state and regional tax increases to pay for education and transit infrastructure. (The state exempted itself from the 1% property tax growth limit so that it could comply with a state supreme court order to adequately fund education.)
We often hear that recruiting more businesses will get us out of this situation, and that we need to exert more effort toward that end. But betting on new companies coming to Kenmore is unpredictable and often comes with other new demands on the city’s finances—new infrastructure, tax incentives, and demands for more services.
What we need instead is financially productive growth that uses our existing infrastructure. To that end, we have been working on incrementally creating the downtown that our suburban bedroom community never had. The city purchased a 1960s strip mall with a gigantic parking lot and sold it back to developers, resulting in more than $120 million in new, mixed-use, private sector investment on the 10 acre property, right across the street from the relocated library (2011) and new City Hall (2010). The City kept a portion of the commercial property and used the proceeds from the sale of the rest of the commercial property to create a new town square and year-round gathering space known as "The Hangar." The City rents a portion of the Hangar to a coffee shop to put eyes on the space and make it pencil financially.
Our budget outlook is why the Strong Towns philosophy makes sense for us. Allowing for incremental infill and the right kind of redevelopment without significantly adding new infrastructure will, over time, create the wealth and the tax base needed to get the city on a financially sustainable track.