City of Tumwater staff reduced the estimated loss in its draft 2025-26 budget from $10 million to $6.8 million.
When city staff presented on October 22 an update on the budget they are developing for the next biennium, Finance Director Troy Niemeyer told City Council that the city would have a budget deficit of $10 million.
Niemeyer told the City Council on Monday, November 4, that the updated deficit is now $6.8 million, two weeks later.
Niemeyer’s slide presentation shows that they reduced expenditures from $105.9 million to $102.6 million, bringing down the deficit.
The finance director said they would discuss in more detail what they had to cut from the expenses in another meeting. He added that they are hoping to reduce the deficit further to around $5 million, so they will continue to work on this aspect.
Another topic on Monday's agenda was the city’s 2025 fee schedule, which outlines the fees for various city services and shows which fees are increasing.
The fee schedule includes several increases to fees such as inspection fees, school district impact fees, utility connection fees, false alarm fees, and youth sports fees.
The council spent most of its time discussing the proposed increases to utility rates, which increase annually.
Niemeyer said that city staff proposes increasing water rates by 6%, sewer rates by 7%, and stormwater rates by 8% for 2025.
Councilmember Leatta Dahlhoff asked Dan Smith, director of the city’s water resources department, how city staff came up with the increases. Smith said that the city has been using a forecasting method that takes into account factors such as capital and operational costs, inflation, and reserve funds for several years now.
Dahlhoff said she wants more information on how these several components feed into the proposed rate increases.
“I also need to see like a graph of inflation is this much, staffing is this much, projects are this much…,” Dahlhoff said.
Councilmember Angela Jefferson agreed, “Why do we need this, and why should we support this? You know, times are tight. Money is tight. Show me the why.”
During this discussion, the city’s capital facilities plan was mentioned, as it details the projects that the city plans to fund. The city’s current capital facilities plan contains planned projects for 2024 to 2029.
Councilmember Eileen Swarthout noted that the capital facilities plan already forecasted a 6% increase in water rates in 2025 to fund 14 projects listed under the water fund.
The forecasts also show the corresponding rate increases for the sewer and stormwater rates that city staff are proposing and projected annual rate increases until 2029.
Councilmember Michael Althauser expressed that he was comfortable passing the fee schedule as the capital facilities plan already laid out the annual increases, so he motioned to adopt it.
Despite earlier comments by Dahlhoff and Jefferson that they would vote no, the fee schedule was adopted unanimously.
Niemeyer mentioned that in addition to the rate increases, city staff are proposing to increase the utility tax from 6% to 12%.
The utility tax will help reduce the city’s budget deficit, as it can be used as part of the city’s general fund. This is in contrast with the utility rates, which may only be used as part of the city’s utility funds.
According to Niemeyer, Tumwater’s utility tax was last increased in 1991, when it was changed from 3% to 6%.
In comparison, the utility taxes in neighboring cities are 6% in Lacey and 12.5% in Olympia.
The finance director said that even with a 12% utility tax and the proposed rate increases for the utility fees, the average utility bill of a Tumwater consumer would still be lower than in Lacey and Olympia.
Niemeyer presented a sample calculation showing that an average utility bill of $129 in 2024 would increase to $143 with all the fees and utility tax increases.
Earlier during the meeting, Dahlhoff said she also needed clarification on why the city needs to increase its utility tax.
“I need to see the numbers… of what it is now, what the need is, what problem we're trying to solve, and why that equates to a 100% increase in utility tax. Because I'm not seeing that, and I'm not in support of that,” Dahlhoff said.
The city would have to pass a separate ordinance to authorize the utility tax increase.
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PamelaJHanson
All three... taxes, fees & rates were discussed in this article. All of them were increases. Just because the Capital Facilities Plan was previously approved is no reason to approve the "Budget Document." Does everyone agree with the "Plan?" Something or more than one thing needs to be cut from the "Plan." I was there and I testified three times. So, here is a partial answer from ARPA DARPA MIT AI (Chat GPT) specifically about WA housing. I prompted it without current info. from Tumwater tax, fee and rate increases and it focused on inflation. I did not ask it about builder/real estate profit margins and tax breaks: ...Recent legislative actions are attempting to slow rent increases, but with price growth persisting—estimated at 6.1% year-over-year statewide—many renters and potential homeowners remain vulnerable to being priced out in the near future if inflation rates do not stabilize or decrease soon.
Saturday, November 9 Report this
Southsoundguy
The City needs help, needs to try something other than business as usual. It should explore financing using digital asset bonds. Stop taxing us more.
Sunday, November 10 Report this