Title
Budget Sustainability and the City’s Approach to Balancing the 2026 Operating Budget Discussion
Recommended Action
Committee Recommendation:
Not referred to a committee.
City Manager Recommendation:
Discuss budget sustainability and the approach to balancing the City’s 2026 operating budget.
Report
Issue:
Whether to discuss budget sustainability and the approach to balancing the City’s 2026 operating budget.
Staff Contact:
Jay Burney, City Manager, 360.753.8740
Presenter(s):
Jay Burney, City Manager
Background and Analysis:
Like most cities in Washington, Olympia’s expenses are outpacing revenue generated through sales, property, and business and occupation tax. The City Manager and the City Council’s top priority is to develop a long-term sustainable budget. In January 2025, during the City Council annual retreat, they discussed strategies to address both balancing the 2026 budget as well as options for achieving long-term financial sustainability.
Council requested that conversations with the full Council start earlier in the year to understand the work being accomplished and to provide guidance. The City Council received an update on the research underway on Tuesday, April 22; held a Study Session on May 13 where they received an update on revenue and expenditures, the current General Fund financial positions, the Olympia Metropolitan Park District revenue, and an update on Priority Based Budgeting.
On Friday, June 13 at the Council’s Mid-Year retreat, they received the results of the Comparable Cities research, received status on revenue and expenditures through the April 2025 which included information on sales tax, basic life support revenue billed and collected, development fee fund revenue, expenditures related to the Nisqually jail, and overall, 2025 expenditures to date.
At this Study Session, staff will engage Council in a conversation on how to approach balancing the 2026 operating budget, which will include both short-term and long-term capacity building considerations
Climate Analysis:
There are no climate concerns related to this item.
Equity Analysis:
Olympia residents and visitors rely on programs and services provided by the City. Balancing the operating budget in a way that maintains equitable and inclusive services while eliminating disparities will require an understanding of who is impacted by potential expenditure reductions or revenue increases.
Neighborhood/Community Interests (if known):
Developing long-term budget sustainability ensures that we continue to provide the essential services our community depends on to live, work, and play in Olympia.
Financial Impact:
This discussion will help the City Council and the City Manager develop revenue and expense options for the 2026 Budget.
Options:
1. Discuss budget sustainability and the approach to balancing the City’s 2026 operating budget.
2. Do not discuss budget sustainability and the approach to balancing the City’s 2026 operating budget.
3. Discuss budget sustainability and the approach to balancing the City’s 2026 operating budget at another time.
Attachments:
None