Title
Public Hearing on the 2026 Preliminary Operating Budget, Utility Rates, General Facility Charges, Parking Rates and Impact Fees
Recommended Action
Committee Recommendation:
Not referred to a committee.
City Manager Recommendation:
Hold a public hearing and receive testimony on the 2026 Preliminary Operating Budget, Utility Rates, General Facility Charges, Parking Rates and Impact Fees.
Report
Issue:
Whether to hold a public hearing and receive testimony on the 2026 Preliminary Operating Budget, Utility Rates, General Facility Charges, Parking Rates and Impact Fees.
Staff Contact:
Joan Lutz, Senior Budget and Finance Manager, 360.753.8760
Presenter(s):
Michael Githens, Finance Director
Background and Analysis:
Budget Sustainability and the impacts on the 2026 Operating Budget have been presented with continued discussions held from the prior year starting with the Council Retreat January 25,2025. Subsequent discussions were held on April 22, 2025, May 13, 2025, and June 13, 2025, with Study Sessions held on May 13, 2025 and June 24,2025.
The City Manager has discussed the 2026 Preliminary Operating Budget with the City Council on August 19, 2025, and September 30, 2025. The preliminary budget incorporates feedback from those discussions. The budget maintains basic service levels and programs and includes limited enhancements in priority areas. Council also held a Public Hearing on November 3rd to hear public testimony.
A Study Session was held on October 14, 2025 with discussion around Business and Occupation Tax increase scenarios as well as proposed reductions.
The 2026 Preliminary Operating Budget includes appropriations to fund:
1. General Fund - basic core municipal services such as Administration, Engineering, Finance, Fire, Human Resources, Information Services, Legal, Parks, Planning, Police, and Transportation.
2. Debt Service Funds - debt service to support outstanding debt obligations.
3. Enterprise Funds - Drinking Water, Wastewater, Storm and Surface Water, and Waste ReSources utility operations.
4. Special Funds - appropriations for Inspire Olympia, Lodging Tax, Parking and Business Improvement Area, and Housing/Homeless Response programs.
5. Operating transfers between funds, including revenues collected through special revenue and utility funds that will be transferred to the capital budget to support projects.
On November 3, City staff presented the City Council with recommendations to the 2026 utility rates and GFCs for the four utilities - Drinking Water, Wastewater, Storm and Surface Water and Waste ReSources as well as rate recommendations for Parking and Impact fees for Transportation, Parks, Olympia School District, North Thurston School District and Development Fees.
This public hearing provides the City Council an opportunity to hear testimony from the public.
Final Budget Balancing is scheduled for November 25, 2025. Adoption of both the 2026 Operating Budget and the 2026-2030 Capital Facilities Plan is scheduled for December 9, 2025.
The 2026 Preliminary Operating Budget appropriates a grand total of $230,433,108 for expenditures of which $122,085,461 is appropriated within the General Fund. The appropriation also includes expenditures for Special and Internal Service Funds. The General Fund, Special Revenue and Internal Service expenditures will be considered by Council under separate ordinance on December 9th.
Climate Analysis:
No specific climate impacts are identified as a result of holding the public hearing. However, the 2026 Operating Budget contains funding to continue our Climate Work Plan.
Equity Analysis:
No specific equity impacts are identified as a result of holding the public hearing. However, the 2026 Operating Budget contains funding to continue our internal/external Equity Work Plans.
Neighborhood/Community Interests (if known):
Members of the community may have an interest in this agenda item as it deals with City finance, direct delivery of services and programs, and fiscal governance.
Financial Impact:
The Preliminary 2026 Operating Budget appropriates $230.4 million of which $122 million is General Fund.
Options:
1. Hold a public hearing on the Preliminary 2026 Operating Budget.
2. Do not hold a public hearing on the Preliminary 2026 Operating Budget.
3. Reschedule the public hearing to a future date.
Attachments:
2026 Preliminary Operating Budget