How does a city with a $6.7 million annual budget end up warning its own residents it could dissolve by 2030, as The Urbanist reported? Clyde Hill's answer showed up on ballots this fall as Proposition 1, a levy lid lift that asks voters to raise the city's property tax rate from about 30 cents to 50 cents per $1,000 of assessed value starting in 2027, with automatic 3 percent increases running through 2036. For the average $4 million home, that works out to roughly $800 more per year. Read on its own, that sounds like the kind of periodic adjustment cities make every decade or so. Read against what the city's Financial Sustainability Task Force actually found, it reads more like the last available lever before the city stops functioning as its own government.

Five of the Last Seven Years of Spending More Than It Takes In

The task force wasn't a marketing exercise. It was a resident-led group the city council formed in December 2024 specifically to independently review Clyde Hill's finances, staffing levels, and long-term trends, separate from city staff's own projections. What they found was a structural imbalance, not a one-year hiccup: operating expenses have outpaced operating revenue in five of the last seven years, and without a major change, the city's reserves run out entirely by 2030.

That timeline landed on a council that has itself been in flux. Mayor Dean Hachamovitch was appointed last year after Steve Friedman resigned, and in July, Councilmember Jennifer Nelson resigned her seat as well, with Jay Henningsen appointed to fill the vacancy. A five-person volunteer council, several of them new to the job within the past two years, is the body that had to decide how aggressively to ask residents to fix a budget gap that predates most of them.

Where the $6.7 Million Actually Goes

The city's 2026 budget makes clear there isn't much room left to trim. Consider how it breaks down:

• $2.8 million goes to the police department
• $900,000 goes to a contract with the Bellevue Fire Department for fire and emergency services
• Together, public safety accounts for more than half of the entire city budget
• The city employs 11 full-time law enforcement staff, compared with 3.75 people in general city administration, 3.25 in public works, and two in planning and development

One detail from the task force's review captures how thin the rest of the operation has gotten: the police department's uniform budget for the year, $31,000, is equivalent to 77 percent of the annual salary of the single employee responsible for the city's parks and recreation facilities. There's no hidden fat to cut here. The city has already trimmed the departments that could be trimmed. What's left is the part residents are least willing to touch.

The Reason Clyde Hill Incorporated Was Never About Taxes

Clyde Hill became a town in 1953, the day before its neighbor Bellevue did the same, and the reasoning at the time had nothing to do with municipal services. Residents wanted control over land use decisions the county wasn't going to give them: lot sizes, commercial zoning, the shape of the place. That control still shows today. The city's minimum lot size is 20,000 square feet, its roughly one square mile of land holds only two commercially zoned parcels, a gas station and a coffee shop, and its roughly 1,100 properties are collectively assessed at nearly $4.93 billion.

Keeping a city-controlled police department, rather than contracting with the King County Sheriff's Office the way some small cities do, has long been treated as central to that same instinct for local control. Wayne Burns, the task force member who has been most vocal about the tradeoffs, put the alternative bluntly to the council: if the city doesn't act, it either goes bankrupt or gets absorbed by a neighboring city, and in that outcome, taxes go up anyway, police service likely goes down, and local control goes with it. He's also been the one arguing against the easy fix of just contracting out policing, telling councilmembers that doing so would mean calling the sheriff the day before you actually need them.

The Land-Use Fight Running at the Same Time

The irony is that the control Clyde Hill incorporated to protect is already being renegotiated, independent of how the levy vote goes. The city is currently facing a legal challenge from Futurewise, a land use advocacy nonprofit, arguing that Clyde Hill's comprehensive plan doesn't meet state Growth Management Act requirements, specifically around capacity for housing affordable to lower income levels. It's the same kind of challenge that pushed neighboring Mercer Island to reckon directly with state housing density mandates.

Clyde Hill has already been adjusting its code under state pressure. The 2023 state law known as House Bill 1110 required the city to allow duplexes on residential lots, and the city complied. But earlier this year, it used an emergency ordinance to walk back allowances for cottage housing, narrowing what can actually be built under its own middle housing rules. Whatever happens with Proposition 1, the version of local land-use control Clyde Hill incorporated to protect in 1953 is not the version it gets to keep going forward. The levy question and the housing question are separate fights, but they're both testing the same premise: how much independence a city of 3,000 residents actually gets to hold onto.

What Proposition 1 Actually Changes

The mechanics of the measure are specific. If approved, the property tax rate increases from approximately $0.30 to $0.50 per $1,000 of assessed value starting in 2027, and the limit factor for 2028 through 2036 is set at 3 percent annual growth rather than the lower cap the city currently operates under. In practical terms, that's about $200 more per $1 million of assessed value, or roughly $800 a year for a home assessed at $4 million. Homeowners 61 or older, or those who are disabled and meet income requirements, may qualify for a partial exemption under state law.

Ballots need to be postmarked or dropped in a King County ballot box by 8 p.m. on November 3. The city has also appointed resident-led pro and con committees to draft the arguments that will appear in the official King County voters' pamphlet, giving both sides of the debate a formal, documented voice ahead of the vote.

Whichever way the vote goes, the choice on the table is not abstract. City officials have said plainly that if the measure fails and the structural gap isn't otherwise closed, Clyde Hill risks running out of operating funds by 2030, a scenario that could force the city into annexation by a bordering jurisdiction. For a city that incorporated specifically to avoid answering to somebody else's zoning map, annexation would reverse the reason it exists.

If you're weighing what any of this means for a specific property, from assessed value to how a levy increase factors into long-term ownership costs, the Conway Florence Team is available for a confidential conversation about your particular situation on Clyde Hill.

This article is general information, not legal, tax or financial advice. Consult a qualified professional about your situation.