Title
Budget Spotlight: Quarterly Report Items
Recommended Action
Committee Recommendation:
Not referred to a committee.
City Manager Recommendation:
Receive a Budget Spotlight presentation related to Quarterly Report Items.
Report
Issue:
Whether to receive a Budget Spotlight presentation related to Quarterly Report Items.
Staff Contact:
Joan Lutz, Senior Budget and Finance Manager, 360.753.8760.
Presenter(s):
Joan Lutz, Senior Budget and Finance Manager.
Background and Analysis:
The quarterly financial report serves as the City’s fiscal early warning system. These reports allow the City Manager and Department Directors to make real-time course corrections before a fiscal issue becomes unmanageable.
The quarterly financial report includes:
General Fund Overview - Provides the “Big Picture”
• High-Volatility Focus Areas
o Jail Contract Costs: This is a “demand-driven” cost. Tracking arrest rates as well as sentencing lengths. If demand is high, this could lead to budget overage in the Police Department.
o Municipal Court Contract Costs: 2026 is the inaugural year for this regionalized model. The report ensures accountability and validation of contract fixed and per cases costs.
o Overtime Costs: High overtime costs can be a signal of several problems (examples would be staff shortage, increased injuries, call volume demand, or training costs).
• Revenue Integrity
o Sales Tax: Tracking sales tax projects against actual performance. Sales tax performance can indicate consumer confidence and other marketplace indicators.
o Basic Life Support (BLS) Revenues & Ground Emergency Medical Transportation (GEMT): 2025 was the first full year of BLS transport capabilities. We bill private insurance companies and submit for additional Medicaid reimbursement to the GEMT Program. The GEMT is a supplemental payment program designed to cover the funding gap between a provider’s actual costs per transport and the allowable amount received from Medicaid.
Development Fee Revenue Fund
• Revenue Integrity
o Building Permit Fees: This report ensures fees cover the actual cost of the planning and development staff. If revenue is down, it may signal a construction slowdown that may require an increase in fees or other adjustments.
Home Fund
• High-Volatility Focus Area:
o Sales Tax Revenue: By City policy, the Home Fund Sales Tax Revenue must be split to 65% for capital and 35% for operations. The capital portion gets sent to the Regional Housing Council. Rising costs of mitigation site operations and encampment clean-ups are at risk of hitting that ceiling and needing General Fund support.
Workers Compensation Fund
• High-Volatility Focus Area:
o Even though the City no longer self-insures new injuries, it remains legally and financially responsible for all claims prior to the move to the state program. This “blind spot” needs to be audited and evaluated quarterly to ensure adequate funds are available.
Climate Analysis:
This agenda item is not expected to result in climate impacts.
Equity Analysis:
This agenda item is not expected to further impact known disparities in our community.
Financial Impact:
There is no financial impact associated with this agenda item.
Neighborhood/Community Interests (if known):
Members of the community may have an interest in this agenda item as is related to transparency, City finances and fiscal governance.
Options:
1. Receive a Budget Spotlight presentation related to Quarterly Report Items.
2. Do not receive a Budget Spotlight presentation related to Quarterly Report Items.
3. Take other action.
Attachments:
None