The Kirkland City Council met at the second of two retreats on May 24 to discuss the 2017-2018 biennial budget, which currently has a projected deficit of $79,000.

According to council documents, the total budget for 2017 is $90,075,000 with expenses falling $681,000 short of revenues.

In 2018, that balance flips with projected revenues totaling $91,195,000 and expenses totaling $91,954,000, creating a net deficit of $79,000.

If one-time payments, like the state subsidy the city is receiving for annexing neighborhoods in 2011, are not factored in, the two-year deficit increases to $492,000.

However, with a large budget, Kirkland City Councilman Toby Nixon said the city is doing fairly well.

“It certainly looks like there’s not a huge budget gap that we would have to close,” he said.

State law mandates cities produce a balanced budget, which can be adjusted half way through the two-year cycle.

The city has been funding various projects through one-time funding, including $134,352 for increased municipal court security and $222,194 for inmate medical care during the 2015-2016 budget, expenses which will likely continue to be funded, Nixon said.

Kirkland generally nets more revenue than anticipated, Nixon said, so excess revenue will likely be directed back into projects which had been funded through one-time funding sources.

“We pretty consistently get more revenue than we projected,” he said. “We’re very conservative in our projections.”

Economic growth has been a boom for the city too, development fees are at 42.7 percent of their projected annual budget only a third of the way through the year.

Year-over-year to-date totals of business sector revenues are also at $6.475 million this year, up from $5.9 million last year at this time. The only retail industry which lost business was telecommunications, which was down 9.1 percent year-over-year.

Sales tax revenue is also up 9.6 percent year-over-year for April.

Kirkland Mayor Amy Walen said she was optimistic about the local economy and said the city could begin improving infrastructure to match major developments like the Kirkland Urban and Totem Lake mall developments.

“We’ve got a very strong economic forecast,” she said.

Local building permits were down 25.5 percent this March in a year-over-year comparison, but this should increase as to previously mentioned developments wrap up and businesses begin to open.

Unemployment was also lower than the statewide average, sitting at 4.2 percent in February compared to 6.5 percent in Washington State. More recent unemployment numbers were not available due to a two-month delay for local unemployment figures.

Walen said the council will also begin looking at ways to increase affordable housing in the city, as well as bringing back proactive police units to combat car prowls.

The City Council will continue to form a balanced budget for approval at their only December meeting.

The budget draft will be put before a public hearing during November and before that a string of meetings and study sessions between the council and city staff.

“That’ll be going on over the entire summer, so people will need to watch the agendas of the council meetings to see which topics are being discussed at each meeting,” Nixon said.