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HomeMy WebLinkAbout11/12/2025 04.B. First public hearing on the 2026 Preliminary Mid-Biennial Budget for the City of Yakima `4 'b • y BUSINESS OF THE CITY COUNCIL YAKIMA, WASHINGTON AGENDA STATEMENT Item No. 4.B. For Meeting of: November 12, 2025 ITEM TITLE: First public hearing on the 2026 Preliminary Mid-Biennial Budget for the City of Yakima SUBMITTED BY: Vicki Baker, City Manager *Craig Warner, Director of Finance & Budget SUMMARY EXPLANATION: In accordance with RCW 35.34.130, the City Council is required to review and amend the 2025-2026 Biennial Budget between September 1 and December 31 of the first year of the biennium. This is the first of two public hearings, following a publicly held study session, providing an opportunity for community members and other interested parties to offer input, comments, and questions regarding proposed budget modifications and adjustments to appropriations and funding levels. ITEM BUDGETED: N/A STRATEGIC PRIORITY 24-25: A Resilient Yakima RECOMMENDATION: Conduct the Public Hearing and accept public testimony. ATTACHMENTS: Proposed Mid Biennial Budget Modifications Public Hearing.pptx 2026 Mid-Biennial Budget GF Forecast.pdf 2026 Mid-Biennial Budget Summary.pdf 19 City of Yakima I- - _ _: _ _ _ _ - 2026 Proposed - ,. J C � ._ � Mid-Biennial .� .. _ r�..•a_. 16-1- _, :_ Budget '� CI Modifications _ .•_ l . T — -1— I�F,Fwr 1.1 Itl7�� � -+i �.._ _ ... . r - 1st Public Hearing �- - z ' . Mg ../►- IT - blillkillisp... : . _ - Presented by: • Craig Warner, Director of '� " y Finance & Budget November 12, 2025 --___- - - 20 /• \ \ ( \ \ \ \\ \ • \ \ 1 I - \ \ I I -NI 1 I , r � ' e t Overview \ 1 / , I I / / / I I / / / / / / / / / / / / / / / // / / „/ State law (RCW 35.34. 120) requires a balanced , , ' '' budget. -''' "The expenditures as classified and itemized in ; the final adopted biennial budget. . . shall not / exceed the total of the estimated revenues and 1 'the fund balance for each fund." .2 , The City of Yakima has already adopted a 2025- / 2026 Biennial Budget. These changes are - /' ii amendments to the adopted budget for 2026. _ , 21 , \ `\ ( \\ \ \\ .\ \\ \ 1 \ 1 I As Posted 9/30 & Presented 10/14/2025 `\\ \ 2026 General Fund BudgetAdjustments , ; , i i ,� , ,' 2026 Adopted 2026 Proposed " ' Budget Amendments Budget ,-'' Beginning Fund $13,485,373 ($1,475,778) $12,009,595 ' Balance Revenues $76,779,080 $16,204,268 $95,983,348 Expenditures ($84,903,677) ($11,520,077) ($96,423,754) I I Ending Fund $5,360,776 $6,208,413 $11,569,189 ' Balance ; 12% Reserve $10,188,441 $11 ,570,850 ,; , Reserve ($4,827,665) ($1,661) ____ " Surplus/(Deficit) 22 , \ \ \ \\ \ \ \ 1 I--.- -\ ,, \ , , , , As Presented 10/14/2025 -\ 1 _ / / / 1 I / ,' ' / '' / / 2026 Unbudgeted Needs \ I / , ' I , 1 , , , , , , , , , , ,, ,/ , , ,/ • ,,, ./, , Police Equipment Replacement ($200K) $ 750,000 , ' Fire Equipment Replacement ($250K) $ 600,000 ,, , / Snow & Ice Removal Reserve $ 250,000 Bond Payment for Facility Upgrades $ 750,000 ,% Police Training Increase $ 100,000 1 IT Firewall Upgrade $ 75,000 IT Server Replacement $ 275,000 , $ 2,800,000 , / , Note: Some of these could use one-time funds such as reserves if available / i / ; / / / / / . 23 • Worker's Compensation Rates Adjusted • Amended Labor Projections • Social Security Maximum What • Minimum Wage Increased changed . Union Gap Fire Contract • Other Misc. Changes • $6 million Reduction in Property Tax , 24 , \ • `\ \• \\ \ \, �\ \ 1 \ 1 1 Revised 2026 General Fund Budget Adjustments I I , , ,, , , , I , , , 2026 Proposed 2026 Revised Budget (10/14) mendments Budget (11/12) 'Beginning Fund $12,009,595 ($36,316) $11 ,973,279, Balance Revenues $95,983,348 ($7,961,764) $88,021 ,584 Expenditures ($96,423,754) $8,072,283 ($88,351 ,471) I I Ending Fund $11,569,189 $74,203 $11,643,392 ' ' / Balance ; 12% Reserve $11 ,570,850 $10,602,177 ;; ;; , Reserve ($1,661) $1,041,215 =__- """ ' Surplus/(Deficit) -"" 25 N \ \N I I \ \ I I \1 , ,,fro osed Ex ense Red uctIons \ 1 / , p p 1 I I / / / 1 I 1 1 I I I I I l / / / I I I / / / / / // / / / / / // / / / / // / / / / // / / / // / / // / / // // // // -'>-- Police: $3,000,000 Fire: $1 ,750,000 > Parks: $1 ,400,000 26 Proposed Reductions Police: $3,000,000 12 Police Officer position 2 filled & 10 vacant positions 1 Police Sergeant 1 filled 4 Community Service Officers 3 filled & 1 vacant position 1 Analyst Supervisor 1 filled position 1 Analyst 1 filled position Reduce radio purchase funding to accommodate transferring 1 CSO to the 3/10 budget Reduction of $50 K to Humane Society Contract 27 Proposed Reductions Fire: $1 ,750,000 Close Station 92, utilizing filled staff positions at other stations to reduce overtime expense Prioritizing retention of employees 28 Proposed Parks: $1 ,400,000 >Washington Fruit Community Center > Lions Pool 5 Vacant, 3 Filled FTEs, & 23 Filled Part-Time Harman Center Positions 16% Reduction in Parks Maintenance Note: Removes the General Fund contributions for these programs 29 / \ \• \ \. \\ \ \• � \ 1\ \ • \ 1 I \ _ \ \ I I _ '\ \ I / I City-Wide Budget Adjustments , , , 12t, 6 1 I / / II ! II /' /' I / / / / / , , / / I, I //'/' // 21. • Proposed 2026 Revised i',;%' Budget (10/14) Amendments Budget (11/12) , '',�'' Beginning Fund $136,742,810 $2,0 $138,808,491 Balance Revenues $312,383,894 ($9,474,756) $302,909,138 1 1 Expenditures ($326,717,428) $9,647,658 ($317,069,770) ;, 1 / , , / I , Ending Fund $122,409,276 $2,238,583 $124,647,859 , • Balance ' '' , ' / / , , � , Note: Includes the General Fund 30 / \ \ \ ( \\ \\ \ \ \ \ 1 \ \ 1 1 \ - \ \ I I _ '\ \ I / 1 �\ \ 1 / / I -�1\ t 1' Next Steps \ 1 1 1 / 1 I I I / / / / , / / , / / /, / / , / / // / / / / ,/ /, / /, , /, , / • 2nd• Public Hearings scheduled for November 18th I 1 1 1 • 2026 Mid-Biennial Budget Adoption December 2nd , i / / / / / / / . 31 / \ \ \ / \\ \\ \ N.N. \ 1 I \\ \ I I ---\ \ I / / I\ \ / / / / ^\ 1 --/ / / / I /� i/ / / 1 / // / \ I I ,' / / \ 1 l / // // 1 I I / // // I I 1 I / / I I 1 l l / / / / / ! / / / / / / / / I/ // / / // / / / / / ��/ / // // // // / ./ // / / / // / / // / // Questions/ / ... „/ Discussion // I / / I / I / I I // / / ///// / / / / // / ,,f „/, „ „ ______. „. ....., , . . .„ ,. „ „„ .... , _ - . , , „ „ ..... _____ , ,, ,, ,.... _______ ,„ „ ......_ / / / /�' i / / / // // /// / / / / / // / / / / / / / 32 / \ \ \ / \\ \ \ \ \ \ 1 ,\ \ I I -\ \ I / / / \ \ / / / / ;'Revenue Options / , / / I I I / / I I I / / / / / / / / / / ,';%/; ' 2026 Budget Options: -- • Public Safety Sales Tax 1/10th of 1 , , , ' • Utility Tax ',-'' •■ Business License Fees Transportation Benefit District (General Fund not impacted) I Future Year Options: I I I/ / • Regional/Fire District ; , • EMS Levy ; / , • Parks District Levy Lid Lift / ' Note: This list is not every option ___-- ' ' - 33 ,, \ , , , , , ----_, i\--\\\\ , Utility Taxes , , , , , , _ „, ;'k , ';impacted Utilities: „ r , 1 1 1 ; , " ' 0 / •i Water — Base Fee plus Consumption , , Wastewater — Base Fee plus Consumption Refuse - Consumption Stormwater — Lot Size/Imperviable Surface , Generates approximately $600,000 per 1 % imposed I Water/Wastewater/Refuse: Average Water/Wastewater/Refuse bill is approximately $200 every two months $2000 at 1 % is $2.00 billed 6 times per year is $12.00 per year % Stormwater: Billed annually and dependent on Lot Size/Imperviable Surface ,,- _______ ;%''' 34 / \ \ `\ / \\ \\ \ \ 1 I \ \ , , , , City of Yakima - Property Tax 1 / ' /, ` ' Pssessments \ I / , ' ' I I / / , / 1 1 / / / , , , , / / / , / I, /,, �' City Total Average Home ' ';' ,' Assessed Annual Average ',' ,' / Assessed Value Value by Tax Total Total Annual /' i' Assessed Value Total Tax Rate per$1,000 Change% Change% Total Tax Increase Growth$ Growth% Growth �'� 2025 $ 12,101,391,489 $22,358,000 1.84755609 3.74% $622,574 $ 1,150.24 $ 36.84 $223.87 24.17% 2.69% / 2024 $ 11,665,072,030 $21,641,884 1.85527217 13.66% $600,127 $ 1,113.40 $22.36 / / I 2023 $ 10,262,855,817 $21,207,174 2.06640089 16.78% $527,988 $ 1,091.03 $ 31.19 1 2022 $ 8,788,218,938 $20,600,919 2.34415181 10.73% $452,123 $ 1,059.84 $25.36 j , 2021 $ 7,936,363,031 $20,107,990 2.53365296 7.15% $408,298 $ 1,034.49 $ 15.89 / 1/ /' / / 2020 $ 7,406,439,444 $ 19,799,077 2.67322473 7.32% $381,035 $ 1,018.59 $ 19.60 ,' ,' / / / / 2019 $ 6,901,338,691 $ 19,418,144 2.81367784 10.58% $355,050 $ 999.00 $ 37.62 i'/ i i 2018 $ 6,241,111,833 $ 18,686,841 2.99415254 4.75% $321,083 $ 961.37 $ 16.40 �' i / / 2017 $ 5,957,828,341 $ 18,367,991 3.08300108 2.17% $306,509 $ 944.97 $ 18.60 .'.' 2016 $ 5,831,302,790 $ 18,006,396 3.08788553 $300,000 $ 926.37 . Note: Information from County Assessor Tax Booklets .' �' . 35 GENERAL FUND FORECAST General Fund Only(without Police&Fire Pensions) 2023 2024 2025 2026 2027 2028 2029 Actual Actual YE Estimate Amended Projected Projected Projected General Fund Beg Balance $ 10,845,338 $ 11,590,608 $ 16,998,756 $ 11,973,279 $ 11,643,392 $ 11,003,701 $ 10,032,553 Revenues 1 Sales Tax 29,144,414 28,681,580 28,549,754 29,400,000 30,576,000 31,799,040 33,071,002 Property Tax 20,164,255 20,762,496 22,497,871 22,351,200 23,021,736 23,712,388 24,423,760 Utility Tax 21,425,554 21,488,293 23,223,561 23,585,838 24,293,413 25,022,215 25,772,881 Investment Interest/Amortization 5,585,689 6,026,043 3,670,000 3,487,501 3,592,126 3,699,890 3,810,887 Charges for Services 3,310,876 3,304,579 3,238,177 1,058,225 1,089,972 1,122,671 1,156,351 Intergovernmental 3,189,146 3,628,878 4,647,775 2,273,836 2,342,051 2,412,313 2,484,682 Licenses&Permits 2,000,113 1,963,097 2,364,750 2,405,250 2,477,408 2,551,730 2,628,282 Operating Contributions&Misc 2,135,955 1,873,317 2,029,902 1,667,216 1,717,232 1,768,749 1,821,811 Other Taxes 1,444,410 1,747,853 1,198,088 1,510,500 1,555,815 1,602,489 1,650,564 Transfers 282,018 290,479 299,193 308,169 Total Revenues 88,400,412 89,476,136 91,419,878 88,021,584 90,956,232 93,990,678 97,128,389 Expenditures 2 Salaries&Wages 42,863,699 44,890,146 47,150,538 44,613,684 46,398,231 48,254,160 50,184,326 Personnel Benefits 15,383,008 16,030,496 17,485,682 15,679,085 16,306,248 16,958,498 17,636,838 Supplies,Equip&Resale 2,360,424 2,548,784 2,448,319 2,362,061 2,432,923 2,505,911 2,581,088 Services&Charges 10,961,667 (116,300) 11,521,670 10,400,422 10,712,435 11,033,808 11,364,822 Transfers 15,427,402 19,451,106 17,219,468 14,995,556 15,445,423 15,908,786 16,386,050 Capital Outlays 399,641 1,032,248 379,384 146,000 146,000 146,000 146,000 Debt Service 259,301 231,508 240,294 154,663 154,663 154,663 154,663 Total Expenditures 87,655,142 84,067,988 96,445,355 88,351,471 91,595,923 94,961,826 98,453,787 General Fund Ending Balance $ 11,590,608 $ 16,998,756 $ 11,973,279 $ 11,643,392 $ 11,003,701 $ 10,032,553 $ 8,707,155 Policy Reserve Amount 3 $ 14,638,409 $ 10,088,159 $ 11,573,443 $ 10,602,177 $ 10,991,511 $ 11,395,419 $ 11,814,454 Net Fund Balance $ (3,047,801) $ 6,910,597 $ 399,836 $ 1,041,215 $ 12,190 $ (1,362,866) $ (3,107,299) FUND BALANCE VS.POLICY RESERVE AMOUNT 20,000,000 15,000,000 >.< ° 10,000,000 • 5,000,000 2023 2024 2025 2026 2027 2028 2029 Actual Actual YE Estimate Amended Forecast Forecast Forecast +Ending Fund Balance —0—Policy Rsv Amt-12% 1 Revenue projections provide for a conservative growth of 3.0%,in all revenues except for Sales Tax,which is shown at 4.0%. 2 Salaries and benefits are projected at 4.0%growth to provide for labor contract agreements and minimum wage increases. Supplies and Services and Payments have a growth factor of 3.0%. Capital Outlays,projected at 3.0%growth,provides for a systematic methodology to replace and repair City buildings,vehicles and other equipment in a timely manner. Funds budgeted for the previous year and not spent are brought forward to the next year. Debt Service and Transfers are projected at 0.0%growth. 3 The General Fund policy reserve amount was 16.7%for 2023,but was changed by City Council to 12.0%on 12/10/24. 2-City of Yakima/2025-2026 Mid-Biennial Budget 36 SUMMARY OF APPROPRIATIONS City of Yakima 2026 Adopted Mid-Biennial Budget Adjustments Schedule A SUMMARY OF APPROPRIATIONS BY FUND Estimated 2025 2025 2025 2026 2026 Ending Inc in Fund Beg YE Est YE Est Amended Amended Fund (Dec in) Fund/Description Balance Revenue Expenditure Revenue Expenditure Balance Reserves General Fund General Fund(001) $ 16,111,949 $ 87,780,702 $ 92,477,533 $ 84,280,584 $ 84,238,560 $ 11,457,142 $ (4,654,807) Criminal Justice(003) 886,807 3,639,176 3,967,823 3,741,000 4,112,910 186,250 (700,557) Fire Relief&Pension 1,208,708 977,088 1,274,763 1,005,076 1,072,969 843,140 (365,568) Police Relief&Pension - 800,000 712,600 681,000 681,000 87,400 87,400 Total General Government 18,207,464 93,196,966 98,432,719 89,707,660 90,105,439 12,573,932 (5,633,532) Economic Development - 165,000 - 402,000 450,933 116,067 116,067 Neighborhood Development 1,021,927 3,363,058 3,363,058 1,868,444 1,841,813 1,048,558 26,631 Community Relations 549,516 450,566 709,112 438,000 701,479 27,491 (522,025) Parks&Recreation 809,132 5,818,487 5,828,362 4,412,188 4,380,729 830,716 21,584 Aquatic Center at MLK Jr Park 719,000 77,270 231,200 89,200 318,577 335,693 (383,307) Aquatics Facilities - 1,088,113 1,022,109 232,665 198,266 100,403 100,403 Clean City Program 869,897 937,032 797,812 952,849 583,990 1,377,976 508,079 Streets&Traffic 3,213,153 6,087,497 6,430,745 5,919,803 5,985,522 2,804,186 (408,967) Cemetery 116,450 422,657 438,433 420,000 457,259 63,415 (53,035) Emergency Services 589,612 2,498,194 2,230,284 2,699,060 2,625,324 931,258 341,646 Public Safety Comm-911 1,109,033 2,826,452 2,853,290 2,830,000 3,091,859 820,336 (288,697) Public Safety Comm-Dispatch 683,086 1,918,167 1,997,033 2,069,392 2,115,119 558,493 (124,593) Police Grants 1,140,176 916,169 992,478 329,840 272,682 1,121,025 (19,151) Opioid Lawsuit 904,535 168,528 84,000 146,621 84,000 1,051,684 147,149 Downtown Yakima Bus Impr Dist 104,040 185,750 184,746 185,750 184,928 105,866 1,826 Trolley 47,796 12,063 15,810 11,869 13,637 42,281 (5,515) Front Street Business Improvement 6,621 2,500 2,500 2,500 2,500 6,621 - Convention&Event Center 1,127,857 2,221,200 2,015,509 2,341,200 2,108,672 1,566,076 438,219 Capitol Theatre 96,737 435,000 434,412 488,319 488,319 97,325 588 PFD-Convention&Event Center 801,724 1,203,900 875,951 1,254,125 1,176,092 1,207,706 405,982 Tourist Promotion Area 136,695 1,303,200 1,315,718 1,223,200 1,234,783 112,594 (24,101) PFD-Capitol Theatre 970,538 862,831 1,198,418 862,831 746,992 750,790 (219,748) American Rescue Plan Act(ARPA) 67,700 3,268,976 3,268,976 67,961 67,961 67,700 - Lodging Tax - 1,745,000 1,745,000 2,219,790 1,795,000 424,790 424,790 Affordable Housing - 941,377 - 135,000 - 1,076,377 1,076,377 PFD LTGO Bonds 633,195 1,413,051 1,413,051 1,405,447 1,880,237 158,405 (474,790) Miscellaneous LTGO Bonds 17,626 1,299,664 1,299,664 1,299,664 1,299,664 17,626 - City of Yakima/2025-2026 Mid-Biennial Budget-1 37 Estimated 2025 2025 2025 2026 2026 Ending Inc in Fund Beg YE Est YE Est Amended Amended Fund (Dec in) Fund/Description Balance Revenue Expenditure Revenue Expenditure Balance Reserves CBD Capital Improvement 55,024 - - - - 55,024 - Capitol Theatre Capital 224,258 560,000 560,000 60,000 60,000 224,258 - Yakima Revenue Development Area 2,214,921 1,007,500 908,516 3,700,000 4,147,534 1,866,371 (348,550) Parks&Recreation Capital 583,375 4,132,683 3,931,410 263,506 274,994 773,160 189,785 Fire Capital 573,449 184,000 241,000 163,000 80,000 599,449 26,000 Law&Justice Capital 1,421,399 407,023 229,528 370,000 252,692 1,716,202 294,803 Real Estate Excise Tax(REET 1) 2,771,591 1,344,448 2,637,455 1,344,448 2,762,390 60,642 (2,710,949) Real Estate Excise Tax(REET 2) 389,902 1,260,000 1,382,943 1,418,000 1,282,008 402,951 13,049 Transportation Benefit District 4,818,377 1,685,000 2,759,561 1,671,000 2,816,994 2,597,822 (2,220,555) Street Overlay&Reconstruction 3,641,435 28,565,583 28,593,452 25,193,015 27,272,435 1,534,146 (2,107,289) Convention&Event Center Capital 2,199,865 280,000 353,123 580,000 1,264,560 1,442,182 (757,683) Cumulative Reserve Capital 44,073 2,001 42,072 (2,001) Airport Operating 1,602,067 1,502,934 2,269,513 1,599,319 1,967,907 466,900 (1,135,167) Airport FAA 300,437 6,911,298 7,092,942 2,582,100 2,288,617 412,276 111,839 Stormwater Operating 3,488,730 4,349,918 5,792,622 4,653,343 5,913,135 786,234 (2,702,496) Stormwater Capital 5,071,479 2,628,809 2,289,367 2,538,365 5,054,313 2,894,973 (2,176,506) Transit Operating 15,949,179 15,320,854 12,199,213 12,750,325 12,685,887 19,135,258 3,186,079 Transit Capital 5,656,221 2,750,000 3,100,011 3,450,000 2,166,996 6,589,214 932,993 Refuse 5,760,331 9,992,170 10,048,687 10,291,935 10,295,427 5,700,322 (60,009) Wastewater Facilities Capital 2,587,769 1,000,000 1,652,543 1,000,000 1,299,237 1,635,989 (951,780) Wastewater Operating 8,921,967 25,191,271 27,048,329 26,029,354 29,859,103 3,235,160 (5,686,807) Water Operating 6,930,093 14,370,290 14,340,793 15,098,500 14,591,340 7,466,750 536,657 Irrigation Operating 734,004 2,301,339 2,398,890 2,370,275 2,485,145 521,583 (212,421) Wastewater Construction Capital 7,203,839 5,439,768 8,948,474 4,038,365 4,476,604 3,256,894 (3,946,945) Water Capital 3,386,442 5,258,654 4,086,021 4,062,719 4,156,389 4,465,405 1,078,963 Wastewater Projects Capital 14,758,679 4,000,000 9,071,888 4,000,000 5,054,451 8,632,340 (6,126,339) Irrigation Capital (661,833) 11,575,810 10,543,796 10,071,084 10,402,522 38,743 700,576 Wastewater LTGO Revenue Bond 15,760 387,550 387,550 381,900 381,900 15,760 - Irrigation LTGO Revenue Bond 29,802 274,900 274,900 273,750 273,750 29,802 - Wastewater Revenue Bond 1,620,948 - - - - 1,620,948 - Unemployment Compensation Rsv 465,227 279,927 208,740 286,978 219,577 603,815 138,588 Employees Health Benefit Reserve 3,543,240 17,313,778 15,656,372 17,056,330 15,991,943 6,265,033 2,721,793 Worker's Compensation Reserve 1,151,702 4,836,371 4,161,183 4,561,691 4,010,763 2,377,818 1,226,116 Risk Management Reserve 7,551,294 4,556,754 7,195,344 5,582,694 7,857,040 2,638,358 (4,912,936) Wellness/Employee Asst Program 230,982 75,000 66,900 75,000 66,900 247,182 16,200 Equipment Rental/Reserves 4,142,127 6,618,778 8,343,499 6,785,878 6,322,144 2,881,140 (1,260,987) Environmental 286,253 615,600 716,905 265,500 324,289 126,159 (160,094) Public Works Administration 717,983 1,691,604 2,029,623 1,798,663 1,970,284 208,343 (509,640) Utility Services 731,809 2,492,928 2,492,928 2,514,723 2,514,723 731,809 - Custodial Fund 210,587 - - - - 210,587 - Cemetery Trust 743,395 12,000 12,000 12,000 12,000 743,395 - $156,011,692 $326,003,210 $343,206,411 $302,909,138 $317,069,770 $124,647,859 $(31,363,833) 2-City of Yakima/2025-2026 Mid-Biennial Budget 38