The Tumwater City Council voted to adopt the city’s 2025-26 budget on Tuesday, Dec. 3.
The adopted budget contains a $5.7 million deficit in the general government fund to be remedied by the city’s fund balance.
Projected revenues are $102.1 million, while expected costs are $107.8 million. The city’s fund balance would decrease from $30.7 million at the start of 2025 to $24.9 million by the end of 2026.
The city’s overall budget paints a larger deficit.
Taking into account its capital projects, the golf course, utilities and internal service costs, and the budget for restricted-use taxes, such as the public safety tax, the citywide deficit is $14.3 million.
Overall, revenues are $325.7 million, while total expenditures are $340 million.
In the development of the budget, City Administrator Lisa Parks highlighted the following priorities: increasing wages for non-represented personnel whose salaries are lagging market-wise, deferred maintenance, and the need for additional staffing, space and security.
The adopted budget includes market rate increases for 108 non-represented personnel, and an additional 2% cost of living adjustment (COLA) increase in 2025 and another 2.5% COLA increase in 2026.
The city expects to have 275 full-time equivalent employees during the next biennium, with 33 positions being new.
Parks noted that 27 of the positions would be funded by identified sources, while only six would be funded by the city’s fund balance.
She added that 33 positions is a pared down figure, as staff directors initially requested twice the amount.
The budget deficit has been a source of concern among city staff and council members.
Parks noted that financial projections by the city’s finance director have been conservative. She pointed out that the initial 2023-24 budget contained a $7.3 million deficit, which actually never happened, explaining that city staff were expecting a recession that did not materialize.
Some council members said that spending on a deficit was unsustainable. Council member Leata Dahlhoff was specifically concerned about using the fund balance to pay salaries.
Still, the council unanimously voted in favor of the budget.
Council member Michael Althauser said that he believes that the proposed budget was responsibly made.
“Spending at a deficit is not sustainable … but I don't think that necessarily means that it's not a responsible budget either,” Althauser said.
“We've been really conservative with making sure that we don't overestimate the revenues that come in, and that we don't plug in too many expenditures,” he added.
Althauser also expressed that he was “very happy” that the city is not laying off its employees like other jurisdictions.
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