By JC Medina
The City of Lacey’s Finance Department presented its preliminary 2024 year-end financial report to the city council, highlighting a significant increase in expenditures and modest revenue gains across major funds.
While revenues rose slightly compared to 2023, spending surged due to rising labor costs and major capital projects, most notably the construction of the new Police Station and Training Facility.
According to Finance Director Troy Woo, the total General Fund expenditures were $82,045,314 or 84.0 percent of the amended 2024 budget, reflecting a $15.8 million or 23.8% increase over 2023. He made his remarks at a council work session on Tuesday, April 8.
This uptick was driven largely by labor-related costs and $19.1 million in capital transfers for the police facility.
“The total salary and benefit increase was about $4.1 million,” Woo said. “Each and every department that has labor was impacted by fairly significant increases.”
The largest departmental increase came from the (Lacey) Police Department.
"Police have the most significant increase. It's obviously the biggest department we have here, too. So it's not really a surprise,” Woo explained.
General Fund revenues in 2024 showed minimal growth compared to the previous year.
Woo attributed the slight reduction to the city council’s decision to rescind the fire suppression utility tax, which accounted for approximately $1.1 million in lost revenue.
He also noted sales tax collections declined by roughly $468,000, describing the trend as a key area of concern the department is monitoring closely.
Council members voiced concern about property tax collection timing.
“According to our own numbers, if you add the 1% and the refunds and excess levy whatever, we're way over that $57,000 from last year,” Mayor Andy Ryder said.
Woo responded, “Yeah, this is a little bit unexpected, but it's, again, I think it's a timing issue.”
Woo added, “This is a tax that almost has a 100% collection rate over time. So if you look at a five-year aging … it's like 99.99%.”
Utility tax revenue was mixed. While overall receipts fell by $824,214 due to the repeal of the fire suppression tax, revenues from electricity and Lacey-owned utilities rose significantly, offsetting some of the losses.
On the utility side, operating revenues for water, wastewater and stormwater funds increased by $6.9 million combined, primarily due to rate increases and structural changes to how capital revenues are received.
Water sales, in particular, surged by 25.5%. However, expenditures also rose with water utility spending up 28.2%, largely from capital transfers and increased costs for replacement meters.
Property tax collections rose by $57,239 to nearly $8 million, or 97.5% of the budgeted total.
However, concerns were raised regarding slower-than-usual collections, possibly due to processing delays and a backlog in foreclosures.
Council also discussed broader economic trends.
“We were on a downward trend from 2021 up until 2024, and then we had a pretty big increase in 2025,” said Woo of new construction revenue. “The big question is, what's going to happen after that.”
Woo noted the city’s conservative budgeting strategy remains appropriate amid mixed economic signals.
City staff plans to continue addressing a projected budget gap through economic development initiatives, new revenue sources and closer expenditure monitoring.
The final audited report is expected by May 30 this year.
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