by Richard Uhlhorn
Finance budget projections:
Heidi Evans, City Finance Director, held an introduction to this budget season with a report of what’s happening nationally to locally. “There are a lot of mysteries and unknowns, of course we hope we can take out some of the guesswork.
She went over 2027 predictions from the White House, Congressional Budget Office, Federal Reserve and the Washington State Finance Management Office who has predicted that the State will continue to have a shortfall, the reasons being a rise in Medicare patients, subsidized child care, Inflation, lower housing construction which reduces the state’s property tax revenue. “All of this contributes to downstream effect to the city,” said Evans.
She presented a chart listing the top 10 sales tax companies in Chelan County which included Trout-Blue Chelan at $73.5 million, Campbell’s Resort at $23,482,266, Walmart at $18,905,112, Seven Acres Foundation at $13,155,296, Whisky Ranch Estates at $10,193,099 and Chelan Lookout at $9,034,591.
Evans also reported that the Lake Chelan School District is not laying off personnel but relying on attrition (retirements) to reduce expenditures. “Overall expenditures are up for everyone.”
“Municipalities are requesting more State shared tax revenues and a tax reform of the1% tax cap on property taxes,” she said.
Evans reported that August, September and October are Chelan’s biggest state revenue generating months, but that she sees a tourism hesitation in 2027. “Looking at next year I do think we are starting to see that hesitation coming from the tourism. It’s a scary situation.”
She told the staff and council that she is looking for 2027 budget recommendations. “The staff is proposing a 6.75% increase over our 2026 budget,” said Evans. She added that staff is seeking an increase in the lodging tax from $925,000 to $1.3 million for tourism.
The Parks Department has projected an increase of 13% over the 2026 budget. This includes the RV Park, Golf Course, Marina and Putt Putt course. Most of that increase would be an 11% increase at the golf course.
The Finance Office is recommending a 6.75% increase into the City’s General Fund. “We are budgeting for no growth in 2027,” said Evans.
City Administrator Laura McAloon state that over the last five years the city expects to see a modest growth in sales tax for 2027.
Affordable Housing Policy-STRs:
Affordable housing and STRs are two issues that have been on the minds of local residents. Community Development Director has recommended that the STR numbers be extended from the 28 current STRs to 50. “A moratorium wouldn’t be the right mechanism to stop a license,” said Ajax.
Over the past five years the Planning Department has issued 350 permits in the neighborhood Ajax said.
Councilman Brad Chitty remarked that the hotels are not single family types. “That’s a good clarifying question,” stated Ajax. “Those are commercial.” Ajax also stated that residential homes used as a Short Term Rental can always revert back to residential use.
McAloon said the STR question is a good one because in her mind it brings up the broader economic impact. “We are talking about one specific element of the economy and housing.” She added that the city is applying for a federal grant and have been awarded an interview with the grant board. “We are looking at diversification of our economy.”
McAloon also stated that the workforce is highly dependent on the tourism industry. “I would be concerned about taking a hammer to a problem that has only been identified in a specific area as we are looking at long term diversification strategies.”
Ajax pointed out that China has a significant number of second homes in Chelan. He added that most of the STRS are actively managed resorts and that site management has a substantial number of people to provide hospitality services.
Councilman Terry Sanders stated that he sees and economic benefit in STRs but said that the council needs to also be thinking about the pretty extensive public sentiment . He also is concerned about capping the STR limit at 50 in the residential area is a bit much. “I think there is probably a middle ground. There’s quite a bit of margin between 28 and 50.”
Councilman Tim Hollingsworth said, “I’m sympathetic for the public support for trying to bring some order the chaos that we see every summer. I’ve said before my concern is the unintended consequences where we simply drive that development that will never be single family residences as John has pointed out.”
Bridge jumping:
McAloon stated that she has had conversations with the Sheriff’s department about law enforcement helping with the bridge jumping issue. “Sheriff Morrison has put out a call to his staff to work some overtime to actually patrol the bridge and address the community concerns and our concerns about illegal behavior.” She added that last weekend law enforcement began issuing citations to the jumpers.
She finished her comments by asking the council for their direction because ultimately the city needs to approve the 2027 budget. Reducing expenditures is a big issue.
All Things Lake Chelan 