Title
Approval of an Ordinance Adopting the 2026 Operating, Special Funds, Capital Budget and Capital Facilities Plan: 2026-2031 Financial Plan
Recommended Action
Committee Recommendation:
Move to accept the Finance Committee’s recommendation to adopt the 2026 Operating, Special Funds, Capital Budget and Capital Facilities Plan and forward to second reading.
City Manager Recommendation:
Move to approve on first reading, and forward to second reading, the Ordinance adopting the 2026 Operating, Special Funds, Capital budgets and the Capital Facilities Plan: 2026-2031 Financial Plan.
Report
Issue:
Whether to approve the ordinance adopting the 2026 Operating, Special Funds and Capital Budget and the Capital Facilities Plan: 2026-2031 Financial Plan and forward to second reading.
Staff Contact:
Joan Lutz, Budget and Finance Manager, 360.753.8760.
Presenter(s):
None - Consent Calendar Item.
Background and Analysis:
State law requires the City Manager to present a balanced Preliminary Operating Budget and Capital Budget to Council each year. By State law, the budget must be adopted no later than December 31. The City Council’s Finance Committee met throughout the year to review, discuss and provide directions to the City Manager on the 2026 Preliminary Operating Budget, Capital Budget and the Capital Facilities Plan (CFP) which includes the 2026-2031 Financial Plan.
Operating Budget
The Preliminary Operating Budget was presented to Council on October 14, 2025. A public hearing on Ad Valorem was held on November 10, 2025, and a public hearing on the Operating Budget on November 3, 2025, and November 18, 2025. Finance Committee met on November 19, 2025, to prepare a final recommendation which was presented to the full Council on November 25, 2025. Since the Preliminary Operating Budget was presented adjustments in revenues and expenditures were made. Major changes to the Operating Budget were discussed with Council on November 25, 2025, and are included in the Ordinance.
Capital Budget and Capital Facilities Plan: 2026-2031 Financial Plan
The Capital Facility Plan (CFP) is a chapter in the City’s 20-year Comprehensive Plan adopted by Council in 2014. The CFP portion of the Plan is updated annually. The first year of the six-year financial plan serves as the City’s annual Capital Budget.
Council received a briefing on utility rates, general facility charges and impact fees, including the Olympia School District and North Thurston School District’s impact fees on November 3, 2025. Major changes to the Preliminary Capital Budget and 2026-2031 Financial Plan were discussed with Council on November 25, 2025, and are included in the Ordinance.
Special Funds
The budget also includes Special Funds, such as Home Fund, Lodging Tax, Parking & Business Improvement Area, Farmers Market Repair and Replacement and Hands on Children’s Museum. Since the Preliminary Operating Budget was presented on November 25, 2025, changes in revenue and expenditure were adjusted and are included in the Ordinance.
Climate Analysis:
No specific climate impacts are identified. However, the 2026 Operating Budget contains funding to continue our Climate Work Plans.
Equity Analysis:
No specific equity impacts are identified. However, the 2026 Operating Budget contains funding to continue our internal/external Equity Work Plans.
Neighborhood/Community Interests (if known):
City Council held public hearings on November 3, 2025, to hear testimony on the Capital Facilities Plan and 2026-2031 Financial Plan. Council also held public hearings on November 3, 2025, and November 18, 2025, to hear testimony on the Preliminary Operating Budget.
Financial Impact:
Total 2026 Appropriations:
• Operating Funds - $ 233,280,854
• Special Funds - $ 26,667,873
• Capital Funds - $ 100,267,703
• Total $ 360,216,430
Options:
1. Move to approve on first reading, and forward to second reading, the Ordinance adopting the 2026 Operating, Special Funds, Capital budgets and the Capital Facilities Plan: 2026-2031 Financial Plan.
2. Direct staff to make changes to the Ordinance and/or the Capital Facilities Plan: 2026-2031 Financial Plan and move to approve with amendments on second reading.
3. Take other action.
Attachments:
Ordinance