During a Sept. 3 meeting of the North Bend City Council, Martin Chaw, the city’s financial director, painted a bleak forecast of the city’s general fund finances. His presentation was followed by a highly-attended public comment period about a potential fix the council is considering.

“What we show is that the general fund balance would go negative in 2027 and would fall below target in 2026,” Chaw said. “What that means in terms of the financial gap is when we compare those two lines, the value of the area between those two lines is worth about $26 million over the 2026-2030 planning period. To put that in context, that is equivalent to about 30% of our expenses.”

The estimated $26 million budget gap is largely due to increasing costs for emergency services provided by the Snoqualmie Police Department and Eastside Fire and Rescue — and a lack of planned economic development to keep up.

Chaw said that the city projects a 69% increase in the cost of police services from 2023-2024 to 2025-2026 alone.

He then brought up several potential options to deal with the budget shortfall.

“In the short term, we can negotiate further with Snoqualmie and Eastside Fire and Rescue. Another option is we could tap into our emergency reserves, which would buy us time to address the gap. But the challenge with that is once we use it, it’s no longer there. It’s a one-time resource,” Chaw said. “In the mid-to-long term, we can continue growing the economy.”

Chaw noted he wouldn’t advocate for cutting expenditures. With 60 city staff, a 30% reduction to fill the funding gap would result in 20 staff positions being cut.

“We are a really small city, so when we cut a position, it has an outsized impact on public services,” Chaw said. “When we take a look back at the $26 million financial gap over six years, to close it’s going to a combination of strategies. There is not going to be one strategy that will be the magic bullet for the city. We are going to need to look hard at strategies and ask some tough questions.”

By 2030, North Bend could have a cumulative general fund financial gap of $26 million. (Courtesy photo)

Property development

One potential fix before the council is AB24-100, a resolution authorizing a development agreement with Middle Fork Property Development LLC.

According to the agenda bill, Middle Fork Property Development LLC seeks to acquire and develop a 35-acre lot at SE 140th Street and 468th Avenue SE. Puget Western currently owns the property.

“The Financial Sustainability Analysis predicts that under EP-2 zoning, the site would increase the assessed value of the property from $6 million to nearly $74 million and create approximately 600 jobs,” the agenda bill reads.

While the development agreement does not mention the developers’ specific intentions for the land, its EP-2 zoning allows commercial and industrial land use. If the council approves the agreement, the developers could purchase the 35 acres from Puget Western and begin preparing a master plan for the site.

“The development of the property would bring employment opportunities, bring new customers to existing and future businesses and attract new businesses and amenities to current and future residents,” said North Bend Economic Development Manager James Henderson at the Sept. 3 meeting. “The development would generate an estimated $70,000 in property taxes, a $63,000 increase from what North Bend currently receives.”

Public comment

During the public comment period, several community members urged the city council to learn more about the developers’ plans before approving the development agreement.

“I would just like to say that I would be disappointed to learn that my representatives would vote for something they know so little about, unless you know more than I do, because the good jobs and amenities and social services that might come our way [are unknown],” said Jodi Laakso, a 30-year resident of North Bend. “To agree to sell this land seems premature and rushed.”

“When I heard about this meeting, I went and looked up the [development agreement] and was pretty confused because there was so little detail. I thought it couldn’t be right like I was missing something,” said another resident. “It turns out there just isn’t that much information. The fact that you all are going to do something that you would permit something you don’t know what you are permitting seems to be a disservice to the community.”

The council pushed the vote to approve the development agreement to Oct. 1 and held a special meeting on Sept. 10 to learn more about the proposed development.

Henderson reminded the council and the public that several studies have highlighted the need for commercial development to ensure fiscal sustainability and meet residents’ needs. He also noted that North Bend has code requirements to ensure that any and all development meets North Bend’s goals, including scheduled public meetings, a transportation study, and an analysis of existing infrastructure. If the development agreement is approved and a master plan is created, that master plan would also have “extensive staff review,” he said.

“The development of this property meets North Bend’s fiscal sustainability goals,” Henderson said on Sept. 10. “It would increase property sales and business occupancy tax revenue, provide North Bend with revenue to provide essential services, pay for new amenities such as parks and sidewalks, and meet North Bend’s long-term financial obligations.”

During the special council meeting’s public comment period, voices opposed to the “rushed” agreement were echoed. One commenter, however, shared her support for the development agreement.

“We are all taxed out, maxed out. It seems to me that having a way to make more money for the city through sales tax and having this development out there is a really good deal, and it should be done,” North Bend resident Jeri Taylor-Swade said. “We need to have more jobs and more recognition of our town so more people will want to come here. I would encourage you to go forward with this thing.”

The city approved a second motion to move the vote on the Middle Fork property development agreement up to their Sept. 17 city council meeting.