Title
Consideration of the Recommended 2026 Proposed Operating, Special (Dedicated) Funds, and Capital Budget for Final Budget Balancing
Recommended Action
Committee Recommendation:
Not referred to a committee.
City Manager Recommendation:
Move to approve a recommendation to the City Council to consider the 2026 Preliminary Operating, Special (Dedicated) funds, and Capital Budget for Final Budget Balancing.
Report
Issue:
Whether to approve a recommendation to the City Council to consider the 2026 Preliminary Operating, Special (Dedicated) Funds, and Capital Budget for Final Budget Balancing.
Staff Contact:
Mike Githens, Finance Director, 360.753.8465
Presenter(s):
Jay Burney, City Manager
Mike 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 City 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 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.
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.
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 City Council held Public Hearings on November 3, 2025, November 18, 2025, with final Budget Balancing to occur on November 25, 2025. Adoption of both the 2026 Operating Budget and the 2026-2031 Capital Facilities Plan is scheduled for December 9, 2025.
Climate Analysis:
No specific climate impacts are identified. However, the 2026 Operating Budget contains funding to continue the City’s Climate Work Plan.
Equity Analysis:
No specific equity impacts are identified as a result of a budget update presentation. 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 is related to City finances and fiscal governance.
Financial Impact:
The Preliminary 2026 Operating Budget appropriates $230.4 million of which $122 million is General Fund.
Options:
1. Move to approve a recommendation to the City Council to consider the 2026 Preliminary Operating, Special (Dedicated) funds, and Capital Budget for Final Budget Balancing
2. Move to approve, with amendments, a recommendation to the City Council to consider the 2026 Preliminary Operating, Special (Dedicated) funds, and Capital Budget for Final Budget Balancing
3. Take other action.
Attachments:
None