The City of Medina says it’s in deep financial trouble unless it can collect more revenue from taxpayers.
City officials outlined the problem in a June newsletter, saying it will face a $500,000 deficit by 2020 and a $3.3 million cumulative deficit by 2025.
"There probably is a disconnect that people think this is a wealthy community why doesn’t the city government have that additional revenue," City Manager Michael Sauerwein said.
The cost of providing services, like police and fire, courts, and parks, have risen about 4-5% per year while revenue has only grown about 2.5% annually, according to the city. Medina says it has used cost-saving measures and dipped into reserves for the last 17 years, but it’s getting to the point where that isn’t enough to cover costs.
"The city over the last 18 years has really burned through our reserves and reached what I call a crossover point," Sauerwein said. "Our expenditures are running into each other, and we're going to have to bend one of those curves."
To raise more revenue, the city will ask voters to lift a levy lid on property tax increases in order to maintain city services for the next 10 years.
The measure, which will be on the November ballot, would increase property tax bills by 5% annually from 2021 to 2025. Currently local governments can raise property taxes by 1% each year without voter approval. On a $2 million home, property taxes would increase by $400 per year or about $33 per month in 2020. By 2025 those homeowners would pay an extra $589 per year or about $49 per month, according to the city.
In 2019, Medina homeowners with a median-priced home of $2.05 million paid about $18,475, according to the King County Assessor's Office.
Medina has the third-highest median home value in King County, according to the assessor’s office behind neighboring Hunts Point and Yarrow Point.
However, the city said its property tax rate is the fourth lowest in the county.
If the measure fails, Medina says it will reassess which services it will offer to residents.