News and Analysis

Although two public hearings have already been held about the budget, new info was made available just today with the materials for next week’s City Council meeting. You can see the Preliminary 2027-2032 Grand Connection Portfolio CIP Cashflow document (link) attached to the September 22nd meeting agenda. 

I had been eagerly waiting to find out how the Grand Connection Crossing budget gap was going to be filled, and it turns out that “Transfers In” is here to save the day, to the tune of $122 million.

As mentioned in a previous post, at the time of the Tax Increment Financing (TIF) vote, there was a Final Project Analysis (FPA) document that explained the funding sources for the Grand Connection. From page 81, the Transportation Benefit District (TBD) tax was supposed to generate 40% of the funds (~$141.4 million) needed to pay back the bonds, and the TIF was projected to provide 24% of the funds (another $84.4 million) over 25 years, with $127.8 million coming from philanthropic sources and “other city funds.”

As shown on page three of the Attachment C – Transportation Scenarios Memo for TBD (part of the agenda materials for the September 15th meeting), the contribution from the TBD is being reduced to $1.26 million per year, a significant reduction that makes the gap even bigger.

The Cashflow document puts the budget of the crossing at $265 million, and that does not appear to include financing costs for the bonds. Page 8 of the FPA had formerly said that the Crossing was expected to cost $230 million. This increase in project cost makes the gap bigger. 

The Final Project Analysis had said that the debt service payments would be $353.6M (page 54), based on anticipated bond amounts of $75 million in 2026; $80 million in 2027, and $75 million in 2028. The new cash flow document specifies that only $75 million is coming from bond proceeds, $25 million each year for 2028, 2029, and 2030. Reducing the bond amount might mean we can expect just $115 million in repayments (though the dates of the TIF are fixed and that might affect the term length if we have a different starting year). This significantly reduces the borrowing costs, assuming there are no interest costs associated with the mysterious “Transfers In” funding source. 

The Cashflow document also has a 10% under-expenditure assumption, which reduces the total being budgeted to just under $239 million (feels like the opposite of a conservative estimate), and assumes $5 million from the Parks Levy, $15 million from grants, and $24 million from private donations. There is also $34.4 million in “beginning fund balance” at the start of 2027. I’m guessing we might already have that $34.4 million now, but I’m not sure where it came from.

I’m sure we can get answers about it, but right now the $34.4 of beginning fund balance and $122.2 million of “Transfers In” feel like mystery money. I also don’t see where we’ve accounted for $40 million in bond servicing costs or think we can conservatively justify the $26.5 million decrease in what we’re budgeting based on the 10% under-expenditure assumption, even if we do have $13.5M in portfolio contingency for unforeseen costs and scope changes. I’m not sure it’s fair to the community to take $5 million from the Parks Levy (though the development of trails *was* supposed to be one potential use of the Levy funds), private donations are not guaranteed, and the bond repayments still rely on assumptions about future redevelopment that will generate TIF tax revenue increases we can capture.

The third and final public hearing will be on October 27th. Please reach out to Council before that if you have concerns about what is being proposed!

Note 1: Page 2 of the September 15th meeting’s Attachment E on Sustainability says we have “Invested $44.2 million to advance design work for the Grand Connection Crossing,” which is more than I had realized. I still don’t have a breakdown for this, and I don’t think it’s included in the $265 million, since that’s the spending forecast for 2027-2032. 

Note 2: Bellevue’s current debt, according to page 95 of the preliminary budget book, is $324 million. Page 243 makes it clear that the Grand Connection Portfolio is not just the Crossing, but this is the only capital project in the Grand Connection Path. The subcategories from the Cashflow document are G-126: I-405 Non Motorized Crossing ($228.6 million), G-130: East Landing ($23.4 million)[connection to Eastrail], and G-131: Portfolio Contingency ($13.4 million). These are described in CIP project detail sheets (pages 13-15).

Part of the budget package that City Council had a hearing on last night is the restructured transportation funding, as listed in an attachment to the agenda called Transportation Scenarios Memo for TBD. The TBD is the Transportation Benefit District that allows us to collect additional sales tax and vehicle annual registration fees, so these scenarios show what is possible with various funding amounts.

The Transportation list of projects now includes five categories: Major Projects, Pedestrian and Bike Mobility, Vehicle Mobility, Neighborhood Mobility, and Preservation & Reconstruction. Normally these would have been the subject of a lengthy discussion at Transportation Commission, which would have then forwarded recommendations to the City Council for review and approval. Since that didn’t happen with the process this time, I’m scrambling a bit to understand the newly created list myself, and wanted to share the organization I’ve added in case it’s helpful to anyone else. Please also share with me any links and references you’re aware of. I’ll be adding more as I have time.

The next opportunity to learn more about the budget will be on September 30th, at the Budget Information Session at Bellevue CIty Hall, 6pm (link).

Neighborhood Mobility, 13-14% of overall investment. This list is from page 7 of the Transportation Scenarios memo, reorganized with numbering added so you can see where they originally appeared in the list.

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If you’ve been looking at the newsletter, you may have seen my recent comments questioning the need for a roadway for vehicles that bisects the new BelRed park designs. 

The road also appears on the BelRed Look Forward LUCA map that is being considered by the Planning Commission, but I’ve received clarification that the decisions being made for the LUCA map only affect the local streets shown on that map, not the alignment of Spring Blvd. Instead, this section of Spring Blvd (Zone 3, from 124th to 130th) is an item being directed and funded through the CIP process (there’s a hearing at City Council tomorrow for this). See page 9 here, which identifies a potential $74.8M allocation for Zone 3 completion. 

Also this week, Parks Board is receiving an update on the three BelRed park design options. You can attend their meeting on Wednesday to voice your opinion or complete the survey which is open through September 30th, but all of the designs assume that there will be a road cutting through the park.  

I do think the local street grid being discussed by the Planning Commission will affect the design of Spring Blvd.  For instance, a connection to 128th north of the rail is shown as having a signalized intersection on the roll map, but all of that could be deleted with the current version of the LUCA map, where the road just curves, and does not contact the street grid to the north. 

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First, let me say I appreciate the Capitol Hill Seattle blog so much. I started reading it several years ago, and their piece on the rental junk fees proposal has so much more detail than I’ve seen elsewhere. Though I knew there had been stakeholders working on the proposal, it’s much more developed than I’d realized from other sources, and the presentation that went with the announcement is also included. 

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As I mentioned in one of my posts about ESC, I think there should be a disclosure of any anticipated sewer connection charges that will need to be paid after the building is occupied. I also had a list of other potential charges that I’ve been collecting over time: “valet” trash pick up, mail/package delivery, utility usage for common areas, technology/connectivity fee, doorknob/lock operation fee, keyfob issuance and replacement fees, pet fees, payment portal fees, tenant portal fees, lease renewal fees, credit bureau reporting fee, lease name change fee, and the duration and cost of the utility connection fee.

When I first started working on this, AI was not a thing, so it’s nice that I was able to plug the list above into Claude, which produced this list:

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…and the landscaping plans for the Park Row building under construction. 

With the removal of 29 trees along the east side of Downtown Park, the volumes created by the landscape architecture designers for the park were upended. There was formerly a shady, quiet walkway on the east side of the park, that functioned like a “room” in the park. It felt like a respite from the bustle of the city because of the sizable Port Orford cedar trees that stood there on park property until last month. 

In addition to the removal of so many trees being a surprise*, there hasn’t been any public presentation of the future design of the landscape for the park, other than what is being shown in the promotional videos for the new building being built next door. The first floor of that new building will be somewhat elevated because of the parking garage underneath, so the place where the trees formerly stood will be replanted with smaller trees in a sloping planter that transitions the grade.

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[7/8/26 An update has been added]

An Environmental Services Commission meeting will be tonight at 6:30pm at City Hall, and here’s one more thing I hope they talk about there.

Another aspect of the new information about DFCCs is that there could be some pretty large buildings affected (I had thought that it was mostly outlying areas, but it was clarified that many DFCCs exist for Downtown and Wilburton too.)

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This letter from a community which would be affected by the “non-controversial” changes proposed as part of the Omnibus code change was compelling to me. It is disappointing that something with obvious drawbacks like this was included in the Omnibus, since the Omnibus includes other major changes to the large development approval process that I think the Planning Commission should have had more time to focus on. The SR-1 zoning classification is new since 2024, and is equivalent to R-2.5.

Since the tree credits cost $1300 per credit and the difference between the current and proposed requirement is 2.5 tree credits per 1000 SF of lot area when there are more than two homes on a lot, a 13,500 SF lot would save $45,500 by reducing their contribution to city-wide replacement tree planting if this change passes, and if they are able to keep or plant trees that meet the requirement, they are not charged anything.

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Dear Mayor Malakoutian, Deputy Mayor Hamilton, Councilmembers Bhargava, Briar, Nieuwenhuis, Robinson, and Sumadiwirya, 

Thank you for considering this request. We also appreciate Nick Whipple’s detailed response explaining the implementation concerns staff has identified on certain SR-1 projects. We understand that the City should examine requirements that may have produced disproportionate outcomes, including unusually high replacement-tree obligations or fees. We are not asking the City to disregard those implementation concerns. 

However, our concern is whether a uniform citywide reduction in SR-1 tree-credit requirements appropriately accounts for the substantially different conditions present in East Kelsey Creek.  Staff’s explanation refers specifically to SR-1 lots that are 13,500 square feet in size. In contrast, Wilburton properties North of NE 8th Street include parcels exceeding one acre. These properties include mature canopy, connected private yards, and environmental conditions associated with the Kelsey Creek watershed. Those parcels are substantially larger than the 13,500-square-foot SR-1 minimum lot area described in staff’s explanation and also larger than the 35,000-square-foot LL-1 minimum lot area shown in the City’s dimensional chart.

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[A new post on this topic was added on July 2nd]

The Environmental Services Commission (ESC) meeting is today, June 18th, at 6:30pm, so here is the quick update (I was able to get some clarifications from staff yesterday). 

Proposal #1: No more DFCCs to cover the costs of system expansions such as sewer extensions. There are also separate latecomer agreements that are not within the scope of this change. 

Big clarification here: While eliminating the localized charge will mean that some new buildings which are easy to connect to the system will somewhat subsidize projects that would have paid more for a system extension to reach them, this is not a blank check for super ambitious connection projects (I was worried about subsidizing growth in our newly upzoned Critical Areas like wetlands and steep slopes). The city’s Utilities team doesn’t go around adding extensions in every place growth is happening, and they have discretion for prioritizing projects that make sense, which might just be a small stub to provide service for a group of existing homes. Many DFCCs are actually in places like Downtown, BelRed, and Wilburton. If there is a place where a builder wants to have service reach a previously undeveloped area, they’d pay that cost and then could ask neighboring properties to reimburse them with latecomer charges once those connect using the extension as well. 

Proposal #2: Simpler Calculation using pipe diameter at the meter instead of calculating a Single-Family Equivalent based on the number of sinks and toilets, etc.

My primary question about the annual fiscal impact is still unanswered, and since the ESC meeting is today, I don’t think we’ll have a number in time for the ESC vote (though we can still say it’s no more than $5M a year). This can probably be calculated before City Council makes a final decision on the policy, at least. From one perspective, the financial impact of Proposal #2 is just a rounding error, but the budget is pretty massive, so that statement alone doesn’t really clarify the scale for me. There are various ways to come up with a fair distribution of system cost, and much of the expense is in the distribution network, even more than the reservoir expansions that we will be spending several million on (to add capacity for Wilburton, etc). Part of that distribution network cost is having larger pipes to handle peak flows, fire suppression capacity, etc. 

I’m still not convinced that a group of homes in a neighborhood is more peaky/variable than an equivalent number of toilets, sinks, and showers in an apartment building, but staff also points out that the average usage per fixture is slightly higher in a single family setting than an apartment setting. This will also raise the portion paid by businesses such as a car wash, which might only have one bathroom or a small number of sinks that would have been factored into the old calculation; now they will pay a greater share to connect when a new carwash is built or a carwash’s supply line size is upgraded to a larger diameter. Even though the CRC typically brings in several million dollars a year, this is money they don’t count on for the budget, since there could be a downturn in construction at any time and it’s important to be conservative.

I’ll follow up with the fiscal impact question, and appreciate having gained this additional background on how it could be argued that the change in CRC calculation is fair.  

Proposal #3 Pay Once Upfront – instead of being added to the utility bill over a span of ten years, have the charges paid at the time of permitting – this should not discourage development if paired with a cut in the fees per Proposal #2, and will eliminate surprise costs for new residents.

A disclosure requirement neatly solves the surprise bill issue without discouraging housing production or displacing the burden onto other utility customers.  This is not solely a utilities question, since I think it’s important for potential tenants to know what costs they can expect. Again, this would cover a wide range of potential expenses that may be related to “valet” trash pick up, mail/package delivery, utility usage for common areas, technology/connectivity fee, doorknob/lock operation fee, keyfob issuance and replacement fees, pet fees, payment portal fees, tenant portal fees, lease renewal fees, credit bureau reporting fee, lease name change fee, and the duration and cost of the utility connection fee.

If you are interested in learning more about Utilities in Bellevue, you can attend the Environmental Services Commission meeting at City Hall (in-person where parking is free, or virtually) and there is an opportunity for public comment at the beginning of the meeting. There is an email where you can send written comment, but as noted in my last post, you probably have to get your comment in the week before the meeting if you want them to see it (and that’s tight when the agenda materials may only come out the week before). I’d also recommend this recording of the Community Meeting on the Utilities Budgets and Rates, which was held last week. https://www.youtube.com/watch?v=6skhCoahhbs

I’ll be following other developments, as we can expect some additional changes due to the changes in meter reading – it makes monthly bills feasible, and this may also allow a change in which months are used for the winter baseline estimate.  This ESC meeting will also include an update on the expected cost increases; utility charges are expected to go up 54%, sewer by 79%, and stormwater utility charges by 42% in the 2027-2032 timeframe. 

[A new post on this topic was added on July 2nd]

I am partly posting these because this is the spot I will add more info/follow-up – the Commissioners were not given the emails I sent before their previous meeting on 6/4/26, and it is unfortunate that the Commission’s inbox does not enable timely communication.

I hope this is also useful context for anyone who may attend the Thursday, June 11, Community Meeting about Utility Budgets and Rates, virtual, 6pm (link) – Proposed utility budget and rate updates, Infrastructure and capital improvement projects, Financial planning and affordability considerations, and Customer assistance resources. Hopefully we can get some of these questions answered then, though I can’t guarantee I’ll be able to attend myself.

The Environmental Services Commission will be considering changes to Utility Connection Charges specifically at their next meeting on June 18th at 6:30pm. If you have comments to them that you don’t get a confirmation were forwarded, you can also forward them to me, and I could make a separate post for those.

(6/18/26)A new post is here, and happily, I’ve received important clarification is on Proposal #1 that significantly reduces my concerns.

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