HomeMy WebLinkAboutFIN 2026-7-13 Item 1C - Discussion - Overview of 2027-2028 Budget ProcessCity of Tukwila
Thomas McLeod, Mayor
Marty Wine, City Administrator
ITEM NO.
AGENDA BILL
Agenda Item 2027/2028 Budget Information
Sponsor Aaron BeMiller, Finance Director
Legislative History July 13, 2026 Finance & Governance Committee
Recommended Motion ☒Discussion Only ☐Action Requested
MOVE TO N/A
EXECUTIVE SUMMARY
The City uses a biennial budget process, which is a two-year fiscal plan beginning January 1st of an
odd-numbered year through December 31 st of the following even-numbered year. The City Council
adopts the biennial budget no later than December 31st of the preceding even-numbered year. In
between the first year and the second year of the budget the Council adopts a mid -biennium
adjustment to account for know changes to the budget. The 2027/2028 budget calendar includes an
anticipated adoption date of November 23, 2026.
DISCUSSION
The budget process will continue throughout the summer and the Mayor is scheduled to present his
Proposed 2027/2028 Budget to the City Council on September 28th. We are bringing some information
to the Committee this evening a s part of the Mayor’s commitment to the City Council to provide budget
information earlier in the process. The information we are providing today will very likely change as we
continue through the process and make budgetary adjustments as decisions are made, but it provides
a baseline with the Committee for those future changes .
Operating budget general update:
•Operating base budgets have been submitted, and finance is currently working with departments
on several significant line item increases from 2026 to 2027 and/or 2028 .
•Enhancement requests for the General Fund total roughly $700K and include 2 new FTE requests
as well as other salary-related changes.
•Labor rate assumptions are unchanged from our June meeting. We will know the actual CPI
(Consumer Price Index) rate increase the middle of this week (week of July 13).
•Departments are currently working on their reduction targets and are due on or before August 3.
o The city continues its work towards resolving the General Fund’s operating gap of
approximately $3 million.
o Targets are based on department's Net City Cost: total expenditures less the revenue
posted to the department, using 2025 actuals. We used 2025 because it is the most
recent complete year of actual spending and revenue, which avoids the distortions of
budgeted figures that never fully materialize. The math is straightforward: actual
revenues are subtracted from actual expenditures, and the remainder is the General
Fund support departments draw; targets are scaled for that net cost. No allocation
method is perfect; every approach involves tradeoffs. But Net City Cost is transparent,
applied the same way to every department, and ties each target directly to the actual
draw on shared General Fund resources.
1.C.
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o The goal of this process is to identify practical, ongoing budget reductions that help keep
the City's finances sustainable while minimizing impacts on services and staffing
wherever possible.
o The budget gap is still being determined. Major variables are not yet settled, so the
working figure may move before the budget is balanced. This exercise will help build a
menu of ranked options the Mayor can draw from if and when reductions are needed to
close the gap. Identifying these options now means leadership has real, costed choices
ready rather than across-the-board guesses made under deadline pressure.
o Reduction guidelines for departments:
▪ Conduct additional review for programs which have been implemented within the
past five years and/or those programs or positions which have not been fully
implemented.
▪ Communicate with other affected departments to ensure what is being suggested
is both adequately discussed with all affected departments or programs prior to
suggesting the reduction.
▪ Reductions must be ongoing, not one -time. We are closing a structural, recurring
gap; one-time savings don't count toward your target.
▪ Amount: Reduction amounts need to include any revenue reduction as an offset
to the total expenditure, if applicable.
▪ Personnel and positions are in scope. Many targets cannot be reached without
them.
▪ Do not include wholly grant-funded items. They're paid for by grants; cutting them
forfeits the grant and doesn't help the General Fund.
▪ Detail level: write effects so a reasonably informed reader can understand them.
No exhaustive narrative needed.
▪ Reuse is fine. If you've suggested reductions before, you can submit them again,
with the understanding that leadership may now act on them.
▪ Do not eliminate statutory/mandated functions, expenditures, or programs. Many
of these programs can likely be reduced in scope but cannot be fully eliminated.
o Timeline at a glance:
▪ July 1 – reduction target issued
▪ August 3 – reductions due
▪ July/August/September – continued budget build-out, balancing, and policy
decisions
▪ Late July/early August – update on balancing gap and known balancing
decisions
Key Upcoming Dates:
July 13 – Budget process information to F&G Committee
August 3 – Departmental operating reductions due
August 10 – Budget process information to F&G Committee
September 8 – Mayor’s final budget decisions
September 28 – Mayor presents 2027/2028 Proposed Budget to Council
October until approved – City Council budget process
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