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HomeMy WebLinkAboutReg 2025-10-20 Item 5A / 6A - Public Hearing - Ordinance Amending 2026 Mid-Biennium BudgetCOUNCIL AGENDA SYNOPSIS Initials Meeting Date Prepared by Mayor's revieav Council revieav 10/6/2025 AB 10/20/2025 AB ITEM INFORMATION ITEM No. 5.A. & 6.A. STAFF SPONSOR: AARON BEMILLER ORIGINAL AGENDA DATE: 10/6/25 AGENDA ITEM TITLE 2026 Mid -Biennium Update CATEGORY ® Discussion Mtg Date 10/6/25 ❑ Motion Mtg Date ❑ Resolution Mtg Date ® Ordinance Mtg Date 11/10/25 ❑ Bid Award Mtg Date ❑ Pub& Hearing Mtg Date 10/20/25 ❑ Other Mtg Date SPONSOR ❑ Council ® Mayor ❑ Admin Svcs ❑ DCD ❑ Finance ❑ Fire ❑ P&R ❑ Police ❑ PIV SPONSOR'S SUMMARY Adjusts the adopted 2026 budget for changes to the assumptions established in 2024 and used to create the 2026 budget. These include items such as CPI/COLA, PERS rates, medical rates, etc. It also allows for the inclusion of business decisions made in 2025 which affect 2026. REVIEWED BY ❑ Trans&Infrastructure Svcs ❑ Community Svcs/Safety ❑ Finance & Governance ❑ Planning & Community Dev. ❑ LTAC DATE: ❑ Arts Comm. ❑ Parks Comm. ❑ Planning Comm. COMMITTEE CHAIR: RECOMMENDATIONS: SPONSOR/ADMIN. Mayor's Office / Finance COMMIYIEE Discussion only COST IMPACT / FUND SOURCE EXPENDITURE REQUIRED AMOUNT BUDGETED APPROPRIATION REQUIRED $ $ Fund Source: Comments: MTG. DATE RECORD OF COUNCIL ACTION 10/6/25 Discussion at 10/6 Regular Meeting 10/20/25 MTG. DATE ATTACHMENTS 10/6/25 Informational Memorandum PowerPoint 10/20/25 Informational Memorandum PowerPoint Draft Ordinance 323 City of Tukwila Thomas McLeod, Mayor INFORMATIONAL MEMORANDUM TO: Tukwila City Council FROM: Aaron BeMiller, Finance Director CC: Thomas McLeod, Mayor & Marty Wine, City Administrator DATE: October 6, 2025 (IIIiervl sec '' Ilber SUBJECT: 2026 Mid -Biennium Adjustment ISSUE As provided in State law, the City Council adopts a biennial budget every two years, with the new biennial budget beginning on an odd numbered year. Like many Cities, the biennial budget adopted by City Council is constructed and viewed as two one-year budgets. Between the first year of the current budget (2025) and the second year (2026), the Mayor will propose changes to the 2026 budget. This process is called the Mid -biennium Adjustment and is important for adjusting the 2026 budget for any known and necessary changes from the time the 2026 budget was adopted in late 2024. These changes include but are not limited to adjusting CPI, healthcare, and retirement rate assumptions, carry-over or new initiatives that were unplanned at the time of adoption, and any other updates necessary for City operations/obligations. BACKGROUND The Mid -biennium adjustment is underway and below is a draft timeline for the Council process: 2026 Mid -Biennium Adjustment Ordinance 10/06/25 — Regular Meeting — Mayor's presents his 2026 Proposed budget changes 10/20/25 — Regular Meeting — 1st Public Hearing & discussion 10/27/25 — FIN Committee — Discussion only 11/03/25 — Regular Meeting — 2nd Public Hearing & discussion 11/10/25 — COW Meeting — Further discussion opportunity 11/17/25 — Regular Meeting — Further discussion opportunity & potential adoption 11/24/25 — Special Meeting (if necessary) — Budget adoption 2026 Property Tax Collection Ordinance 10/20/25 — Regular Meeting — Public Hearing 10/27/25 — FIN Committee — draft ordinance for review 11/10/25 — COW Meeting —Discussion 11/17/25 — Regular Meeting - Adoption DISCUSSION The Mayor is presenting his proposed changes to the adopted 2026 budget. The proposed changes reduces the overall expense budget by $682.7 thousand and includes a General Fund expense reduction of $843.2 thousand. Once the Mayor concludes his remarks on his 2026 Proposed Budget, staff will walk through his proposed changes in more detail. he0 M000003yrpr preserrirterri III u s p u , s e „I ,. III 00.iu n rs tc',,0000 the0 00.iI . p i xI . , � u.iI 3i �.,i . i h e��u i . 0.0 . a I . n '•`P °""4 .I„i prop .'�0"i �000�00300„se bu�„i,^ J3u' . tl ry „"'„4" u,akwr;i ,I. , 7wh0crh liu,n IIu.J„i� r02o„01II II utu q!' II20 '„o ° ... i,. u0 4!2I II2 00„„„„" 0 °. 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E, 324 !I'::p.r 0 INFORMATIONAL MEMO Page 2 („:„),•(;totbe.r „";?(,,„„),, „";?(„„„125,, f"'rst ()I' two pu„iblIII(; (Dtrli bu„,J(1,51e't St rill t Af 0 0 h (j t() 0 0 CAAf t S (:',C)Irly'rrly"11 tc„) prc„)vII S bu„,JCI,,c,]S31,'"t ""1"'"he IIt(3,11ruos for clIs(;u„,JasIIorii filc„‘‘,,,totber „";?(,,„„),, (Dtrli (1";ctu„,Jr1(;011 frotriuo 11C1/€3 rt11(31,1,31,10r"1,c1,,,,, Mu„,Jr10(;JII (1'; 0 rt („10s(;u„,.issII (Dtrii buJclocaet requ„,JE,Ist II II FINANCIAL IMPACT Discu sion item only. There is no financial impact sociated with this agenda item. However, a formal Ordinance will be brought forward adjusting the adopted 2026 budget based on the proce,,s. 11',UA RECOM MENDATION Information Only. There is no recommendation currently for future action. 0""""' Omani to th(31, otverruo be,r 2025 11""Reg„illar MeetIIng tor a s CO nd h(31,arIIn(„1„ ATTACH MENTS Draft (01 rcl no nc,„(31, 325 Public Hearing: Proposed 2026 Mid -Biennium Adjustment Tukwila City Council Meeting October 20, 2025 Mid -Biennium Adjustment • October 6: Mayor's presentation, discussion of revenues and expenses, significant changes in cost drivers. • October 20: 1 St Public Hearing on the proposed budget, Public Hearing on the 2026 Property and Excess levies, continued discussion on the proposed budget. • October 27: Finance & Governance Committee for continued discussion on the proposed budget. Mid -Biennium Adjustment • November 3: 2nd Public Hearing on the proposed budget, further discussion on budget. • November 10: Further discussion on proposed budget. • November 17: Continued discussion on proposed budget, adoption of the 2026 Regular and Excess levies, potential adoption of the 2026 Mid -Biennium Adjustment. • November 24: Adoption of 2026 Mid -Biennium Adjustment General Fund Expenditures and Transfers Out By Type Debt Service, 5% Services, 25% Wages, 45 Machinery & Equipment, 0.2% Supplies, 2% Intergovernmental Expenditures Detail Transfers Out to Other Funds, 1 % 5% _- Valley Communications, 2% SCORE Jail, i% Intergov. Other, 0.3% City Cou 2 2025,2026,1 General Fund Revenues and Transfers Out by Type Transfer In From Fund 305 (Debt Service), 2% Misc. Revenue, 1% Fines and Penalties, 0.5% Charges for Services, 3% Indirect Cost Allocation, 4% Intergovernmental Rev., excluding Grants, 5% All Other Taxes, 21 % Licenses '& Permits, 8% 7% One -Time Funds Detail Grants, 1% Sale of Capital Assets, 5% Transfer In From Fund 302 (Fund Closure), 1% City Cou 2 2025,2026,1 All Funds Expenditures and Transfers Out All Funds Revenues and Transfers In Sale of Capital Assets, 3% Capital Contributions, 2% Miscellaneous, Capital, 3% � +�� 7% Services, 40% Supplies, 7% Fines & Penalties, 0.2% Transfers In, 7% Charges for Services, 25%. Licenses & Permits, 4% All Funds Changes Fund 2026 Resources Adopted 2026 Resources Proposed Resources Difference 2026 Expenditures Adopted 2026 Expenditures Proposed Expenditures Difference GENERAL & CONTIN- GENCY Fund 000 - General $ 78,205,129 $ 78,322,596 $ 117,467 $ 78,611,612 $ 77,768,407 $ (843,205) Fund 105 - Contingency 120,000 120,000 - - - - Total General & Contingency 78,325,129 78,442,596 117,467 78,611,612 77,768,407 (843,205) SPECIAL REVENUE Fund 101 - Hotel/Motel Tax 1,047,750 1,047,750 - 1,656,409 1,644,765 (11,644) Fund 109 - Drug Seizure 98,100 98,100 - 73,000 73,000 - Total Special Revenue Funds 1,145, 850 1,145, 850 - 1,729,409 1,717,765 (11, 644) DEBT SVC Funds 2**-LTGO Debt Service Funds 4,736,172 4,736,172 - 4,736,172 4,736,172 - Fund 213 - UTGO Bonds 4,905,000 4,905,000 - 5,059,475 5,059,475 - Local Imp. Dist. #33, Guaranty Funds 461,500 461,500 - 453,000 453,000 - Total Debt Service Funds 10,102,672 10,102,672 - 10,248,647 10,248,647 - All Funds Changes Fund 2026 Resources Adopted 2026 Resources Proposed Resources Difference 2026 Expenditures Adopted 2026 Expenditures Proposed Expenditures Difference CAPITAL PROJECTS Fund 103 - Residential Streets 4,869,000 4,869,000 - 4,953,000 4,953,000 - Fund 104 - Bridges & Arterial Streets 11,042,001 11,042,001 - 10,440,651 10,537,131 96,480 Fund 301 - Land Acq, Rec, Park Develop 6,165,690 5,665,690 (500,000) 7,237,236 6,663,000 (574,236) Fund 302 - Urban Renewal - - - - 731,255 731,255 Fund 303 - General Government Imp 401,000 401,000 - 400,000 400,000 - Fund 304 - Fire Improvements 600,000 600,000 - 600,000 600,000 - Fund 305 - Public Safety Plan 1,115,000 1,115,000 - 1,317,849 1,317,849 - Fund 306 - City Facilities 846,937 5,000 (841,937) 825,238 825,238 - Total Capital Projects Funds 25, 039, 628 23, 697, 691 (1,341, 937) 25, 773, 974 26, 027,472 253,499 All Funds Changes Fund 2026 Resources Adopted 2026 Resources Proposed Resources Difference 2026 Expenditures Adopted 2026 Expenditures Proposed Expenditures Difference ENTERPRISE Fund 401 - Water 10,254,836 10,254,836 - 11,116,611 11,023,093 (93,518) Fund 402 - Sewer 13,101,957 13,101,957 - 16,030,741 15,917,066 (113,675) Fund 411 - Foster Golf Course 2,787,500 2,787,500 - 3,300,595 3,287,832 (12,763) Fund 412 - Surface Water 14,978,410 14,978,410 - 17,208,282 17,088,102 (120,180) Total Enterprise Funds 41,122, 703 41,122, 703 - 47, 656, 229 47, 316, 093 (340,136) All Funds Changes Fund 2026 Resources Adopted 2026 Resources Proposed Resources Difference 2026 Expenditures Adopted 2026 Expenditures Proposed Expenditures Difference INTERNAL SERVICE Fund 501 - Equip Rental & Replacement 6,084,081 6,093,106 9,025 4,968,756 4,946,807 (21,950) Fund 502 - Self -Insured Healthcare Plan 8,955,150 8,346,309 (608,841) 6,831,880 7,031,880 200,000 Fund 503 - LEOFF I Self -Ins Health Plan 519,152 474,514 (44,638) 519,152 599,903 80,751 Total Internal Service Funds 15, 558, 383 14, 913, 929 (644, 454) 12, 319, 788 12, 578, 590 258,801 U } o Q Fund 611 - Firemen's Pension 155,000 155,000 - 82,000 82,000 - TOTAL BUDGET $ 171,449,365 $ 169,580,441 $ (1,868,925) $ 176,421,659 $ 175,738,975 $ (682,684) FTE Count By Fund / Department FUND/Department 2025 Adopted FTE 2026 Adopted FTE 2025 Current FTE 2026 Projected FTE Difference 2025 Current vs 2026 Projected Notes General Fund 249.44 249.44 250.44 250.44 0 City Council 8 8 8 8 0 Mayor 30.29 30.29 31.29 31.29 0 Finance 15 15 15 15 0 Parks and Recreation 25.75 25.75 24.75 24.75 0 Community Development 28.75 28.75 28.75 28.75 0 Municipal Court 11.9 11.9 11.9 11.9 0 Police 100 100 101 101 0 Public Works 29.75 29.75 29.75 29.75 0 Hotel/Motel Tax Special Rev Fd 0.25 0.25 0.25 0.25 0 Arterial Street Fund 6.1 5.5 6.1 6.1 0 Water 8.56 8.56 8.56 8.76 0.2 Reallocation of Utilities Project Manager Sewer 5.87 5.87 5.87 6.17 0.3 Reallocation of Utilities Project Manager Golf Course 10.5 10.5 10.5 10.5 0 Surface Water 18.28 18.28 18.28 17.78 -0.5 Reallocation of Utilities Project Manager Equipment Rental 5 5 5 5 0 Total 304 303.4 305 305 0 elia=Beennium Wrap Up / Q&A City Council 2026 Mid -Biennium Adjustment Continued Discussion Tukwila City Council Meeting October 20, 2025 Change Tracker 10/20/2025 General Fund Expense - Parks $312,000 Department of Natural Resources Community Forest Assistance Grant award. Notification of award on 10/8/2025. Grant will support restoration and conservation programs for local tree canopy and natural spaces. Grant revenue 100% supports these activities. 10/20/2025 General Fund Revenue $312,000 Department of Natural Resources grant award. This grant provides resources for the activities listed - Parks above. id -Biennium Council Questions 10/6/2025 10/20/2025 Papyan What revenues go into the General Fund "security" line? Reimbursement for Law Enforcement Services (e.g. Westfield Mall security) Booking Fees, Probation Fees and safety -related inspection fees. 10/6/2025 10/20/2025 Seal Number of LEOFF retirees? 24 beneficiaries. The Law Enforcement Officers and Fire Fighters' Retirement System (LEOFF) Plan 1 was available for law enforcement officers and firefighters hired before October 1, 1977. The plan includes survivor benefits for eligible spouses or dependents. 10/6/2025 10/20/2025 Sharp Provide a cost breakdown of the Park Ranger program. See slides in new presentation. 10/6/2025 10/20/2025 Ca macho Do other cities' Park Ranger positions reside in PD? Mukilteo & Mount Vernon host their park ranger in PD; Kirkland, Issaquah, Everett, Snohomish County, Bellevue- park rangers are in P&R departments. id-Biei_u Park Ranger Program Current Status Park Ranger in PoliceDepartnient Labor Costs 81,422 Salani 5,000 Estimated Overtime 59,083 Benefits 145,505 Total Labor Costs Ancillary Costs 3,550 O&M for Park Ranger Truck 5,475 Replacement Costs for Park Ranger Truck 5 OW Park Ranger Supplies 5,000 Park Ranger Services 10.000 Park Ranger Trailing/Development 29_025 Total Ancillary Costs Fanner Status Park Ranger in Parks Department Labor Costs 81,422 Salary 5.000 Estimated Overtime 59,083 Benefits 145.505 Total Labor Costs Ancillary Costs 3,550 O&M for Park Ranger Truck 5,475 Replacement Costs for Park Ranger Truck 5,000 Park Ranger Supplies 5 00 Park Ranger Services 10,000 Park Ranger Training/Development 29_025 Total Ancillary Costs osts Tukwila City Council, Oct 20, 2025, 2026 MidBiennium Adjustment Park Ranger Program Current Status ParkRanger in Police De ent Budget Redo ns (47,118) 96O Police Reduction: Equipment Police Reduction: Supplies Parks Reduction: Cancel Contracted Security Former . Status Park Ranger in Parks Department Budget meets (78,530) Transfer In From Fund 301 (Parks Lew Funds) (96,000) Parks Reduction: Cancel Contracted Security elia=Biennium Next Steps / Q&A AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF TUKWILA, WASHINGTON, AMENDING ORDINANCE NOS. 2749 AND , WHICH ADOPTED AND AMENDED THE CITY OF TUKWILA'S BIENNIAL BUDGET FOR THE 2025- 2026 BIENNIUM, TO ADOPT AN AMENDED MID - BIENNIUM BUDGET; PROVIDING FOR SEVERABILITY; AND ESTABLISHING AN EFFECTIVE DATE. WHEREAS, on November 25, 2024, the City Council adopted Ordinance No. 2749, which adopted a mid -biennium budget amendment, in accordance with RCW35A.34.130; and WHEREAS, a mid -biennium budget amendment was presented to the City Council in a timely manner for their review, in accordance with RCW 35A.34.130; and WHEREAS, on October 20, 2025 and November 3, 2025, following required public notification, the City Council conducted public hearings on the proposed mid -biennium budget amendment; NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF TUKWILA, WASHINGTON, HEREBY ORDAINS AS FOLLOWS: Section 1. Ordinances Amended. Tukwila Ordinance Nos. 2749and are hereby amended with the City Council's adoption of the document entitled "City of Tukwila 2025- 2026 Mid -Biennium Adjustment," attached hereto and incorporated by this reference as if fully set forth herein, in accordance with RCW 35A.34.130. Section 2. Purpose. The purpose of the 2026 Mid -Biennium budget adjustment is to correct the 2026 budget for known changes to rates and/or budget decisions made in 2025, which affect the 2026 budget. Section 3. 2026 Estimated Revenues and Appropriations. The totals of the estimated revenues and appropriations by fund for 2026 are as follows: 2025 Legislation: 2026 Mid -Biennium budget amdt Version: 10/8/25 Staff: A. BeMiller Page 1 of 4 344 ..e :.et • -e Revenues :.et • .e Expenditures f9,4! General 15,56/1,070 151,292/179 153,573,762 16,282,787 101 Hotel/Motet 3,/110,870 1,9/15,500 2,677,822 2,678,5/1a 103 City Street 1,858,573 ••••• eee 5,803,000 2,054,573 10/1 Arterial Street 5,278,831 16,628,002 18,077,377 3,82 ,45 105 Confl 7,30/1,961 470,639 0 7,775,600 Drua Seizure Fund 30/1,562 196,200 1/16,000 35/1,762 2xx LTGO Debt Scrvcc FundG 0 9,'181,650 9,/181,650 0 213 UTGO Bonds 479,708 9,610,000 9,991,200 98,508 206 LID Gu rant 799,243 16,000 815,243 233 2013 LID 513,199 938,000 937,000 51/1,1 301 Land Acquisition, Recreation & Park Dev, 4,130,437 9,006,990 10,320,841 2,816,586 303 General Government Im ro em nts 324,512 938,000 226,512 30/1 Fre ImDrovemcnt, 0 1,200,000 1,200,000 0 305 Pubhc SafetyPI 1,056,573 2,230,000 2,636,673 6/19,900 306 Cftv FacUfle 422,811 2,693,87/1 1,825,238 1,291,117 401 Water 4,174,701 21,596,192 23,117,822 2,653,071 402 Sewer 10,310,151 25,629,062 33,381,410 2,557,803 411 Foster Golf Course 5,575,000 6,262,0/1 1,337,1/17 412 SurfaceWat 10,866,876 29,720,677 33,868,02/1 6,719,52 501 EauDmentR tl 1,808,659 12,307,228 11,104,567 3,011,320 502 InsuranceFund 3,393,651 17,257,7/1/1 7,010, 503 InsuranceLEOFF 1 Fund 36,695 1,065,499 611 'Fremens Pens 310,000 16/1,000 1,868,'166 AMOUNTS ARE SUBJECT TO CHANGE DURING BUDGET PROCESS Fr d (..)()0 er r Ff....tr7d .1(15 „„„1!„.1.1,12121212„EgLe„„„„„ roplase 1E,2goglipInd it Lure .7.7„1768„,K17 27,126„ 727 ,"75(„) Ff....trlel .1(33 -- RE?sich?rltiell „StycNe‘t....s. 2025 Legislation: 2026 Mid -Biennium budget amdt Version: 10/8/25 Staff: A. BeMiller Page 2 of 4 345 Furl(' (14 -- „Streets 1'1 /42 /7/1•1 j-77,77) Furl(' tee 8,,,f5h0,5) Fur? B (Is; 51,0591,i/ins .56.2„.„134 5,665,600 61,6631,00( 531 Furl(' :""0"i? t trhan Rein 471(1 i'l("7/1 Fi in d -$04 -- Fire, irnpri)vernerits 50(1 (WW1 50(1 (WW1 Fi d '3(15 P f hl 1'7( C(7177,7t v Plan iT,?•77" (114 Furl(' 3(16 855,„„836 Furl(' Furl(' )711 -- F735. ter (iiii'cilt Punt./ 41 -- irliiTrie? Fund 5(1,1. -- „i„„iii„:1,t1.2 Peri Furl(' „Self:-/risitire‘cl 131(ln Furl(' 5(33 / „Self -iris ili?alth .„';,•:?(...1),„i„?„5?„2 :5 7.177,71,717 Furl(' 61.1 Fire‘rn,eiri 13,einsifi)ri ,E?6,8,2766 1.55 000 (1(30 "1-0101.11 Fu. it) 0 6„,3 2025 Legislation: 2026 Mid -Biennium budget amdt Version: 10/8/25 Staff: A. BeMiller Page 3 of 4 346 Section 4. Copies on File. A complete copy of the amended budget for 2025-2026, as adopted, together with a copy of this amending ordinance, shall be kept on file electronically by the City Clerk and accessible from the City's website in accordance with Washington State records retention schedule requirements and City policy, and shall be made available to the public upon request. A copy of the amended budget for 2025-2026, as adopted, together with a copy of this amending ordinance, shall be transmitted by the City Clerk to the Division of Municipal Corporations of the Office of the State Auditor and to the Association of Washington Cities in accordance with RCW 35A.34.130. Section 5. Corrections by City Clerk or Code Reviser Authorized. Upon approval of the City Attorney, the City Clerk and the code reviser are authorized to make necessary corrections to this ordinance, including the correction of clerical errors; references to other local, state or federal laws, codes, rules, or regulations; or ordinance numbering and section/subsection numbering. Section 6. Severability. If any section, subsection, paragraph, sentence, clause or phrase of this ordinance or its application to any person or situation should be held to be invalid or unconstitutional for any reason by a court of competent jurisdiction, such invalidity or unconstitutionality shall not affect the validity or constitutionality of the remaining portions of this ordinance or its application to any other person or situation. Section 7. Effective Date. This ordinance or a summary thereof shall be published in the official newspaper of the City and shall take effect and be in full force and effect five days after passage and publication as provided by law. PASSED BY THE CITY COUNCIL OF THE CITY OF TUKWILA, WASHINGTON, at a Regular Meeting thereof this day of , 2025. ATTEST/AUTHENTICATED: Andy Youn, CMC, City Clerk Thomas McLeod, Mayor APPROVED AS TO FORM BY: Filed with the City Clerk: Passed by the City Council: Published: Effective Date: Ordinance Number: Office of the City Attorney 2025 Legislation: 2026 Mid -Biennium budget amdt Version: 10/8/25 Staff: A. BeMiller Page 4 of 4 347