Title
Budget Spotlight: Budget Amendments and How They Work
Recommended Action
Committee Recommendation:
Not referred to committee.
City Manager Recommendation:
Receive the Budget Spotlight: Budget Amendments and How They Work
Report
Issue:
Whether to receive the Budget Spotlight: Budget Amendments and How They Work
Staff Contact:
Joan Lutz, Senior Finance Manager, 360.753.8760.
Presenter(s):
Joan Lutz, Senior Finance Manager
Background and Analysis:
The City of Olympia adopts its annual budget in December of the preceding year based on projected revenues, planned expenditures, City Council priorities, community needs, and legally mandated financial requirements. Once adopted, the budget serves as the City’s financial plan for the year. However, circumstances routinely change throughout the year. New funding opportunities emerge, project scopes evolve, operational needs shift, and expenditures may occasionally need to be realigned across funds.
State law (RCW 35A.33) requires municipal expenditures to be authorized through an adopted budget, while Olympia Municipal Code (OMC Chapter 3.04) establishes the structure of City funds and the authority required to revise appropriations. When additional spending authority is needed beyond what the City Council has previously approved, the City must amend the budget through formal Council action. This process ensures compliance with state law, maintains appropriate internal controls, and protects the integrity of the City’s financial practices
Budget amendments are a normal and expected part of the City’s financial cycle. They allow departments to respond to emerging needs while ensuring that resources remain aligned with adopted priorities, maintaining transparency, and meeting legal requirements for responsible fiscal stewardship. Budget amendments are typically presented to the City Council on a quarterly basis, although additional amendments may be brought forward more frequently when necessary.
Budget amendments typically fall into several categories, including carryover requests, operating adjustments, capital project updates, creation or modification of internal service funds, acceptance of grant awards, and updates to revenue projections. Departments identify amendment needs throughout the year based on changes in funding, operations, project needs, or other circumstances.
Once a need for a budget amendment has been identified, the Finance Department evaluates the request for accuracy, funding source availability, compliance with municipal code, and other applicable legal requirements. This review includes consideration of one-time versus ongoing financial impacts, fund-level capacity, operational and staffing considerations, and, when applicable, grant or regulatory requirements.
Following internal review, the amendment proceeds to the City Manager’s Office and through leadership review. Amendments requiring changes to appropriations, establishment of new funds, or authorization of additional full-time equivalent employees are brought to the City Council for adoption by ordinance. This formal process maintains accountability and ensures that expenditures remain properly authorized.
Budget amendment activity also contributes to fiscal transparency. By formally documenting changes to the adopted budget, the City provides clarity regarding how resources are adjusted in response to evolving conditions. This process supports long-term financial planning, reinforces public trust, and strengthens the City’s ability to deliver services in a responsible and adaptable manner.
Climate Analysis:
This agenda item isn’t expected to result in an impact to greenhouse gas emissions.
Equity Analysis:
This agenda item is not expected to further impact known disparities in our community.
Neighborhood/Community Interests (if known):
Members of the community may have an interest in this agenda item as it deals with City finances, transparency, and fiscal governance.
Financial Impact:
There is no financial impact associated with this agenda item.
Options:
1. Receive Budget Snapshot: Budget Amendments and How They Work.
2. Do not receive Budget Snapshot: Budget Amendments and How They Work.
3. Receive Budget Snapshot: Budget Amendments and How They Work at another time.
Attachments:
None