Good evening and welcome.

Good evening and welcome to the September 15th meeting of the Finance Committee of the Olympia City Council.

We have all of the committee members present and plenty of staff to get the job done.

So maybe we could start by considering the agenda.

Move approval.

Second.

Right.

It's been moved and seconded.

All in favor of approving the agenda as published.

Say aye.

All right.

We have an agenda.

And I am working my way towards having internet connection here.

Because for some reason, it didn't want to automatically connect like it usually does.

Um we have minutes to approve, right?

Yep.

Yep.

The August 18 minutes have a move approval.

I'll second.

All right.

All in favor of approving the minutes of August 18th, say aye.

Aye.

Wonderful.

What a chorus.

And we're on to committee business.

And um the one item that we have before us this evening is uh an update and discussion about the 2026 operating budget.

City manager Jay Burney's going to lead off the conversation.

Thank you very much.

This has been a uh a twisting journey to get you to tonight.

And I think we're gonna we might take another couple twists tonight based on how the conversation goes.

So tonight is the first budget update for the finance committee around the 2026 budget.

Specifically, we're here to provide a thorough overview of the revenue options that have been in front of council a few times, and we've kind of listened to the questions that we've that we've heard along the way and have continued to fill in some blanks.

And then the chair and I had a conversation last week that he shared with me about finding some maybe some additional time and a process for some additional council conversation around all of this.

So what we're hoping to do tonight is to get some feedback from the committee in terms of next steps and conversations with the full council around our path on the budget, whether they be revenue or expenditure reductions and kind of what that looks like.

So what I thought I'll do is um I'll set the stage a bit, just kind of where we are with with everything, and then I'm gonna pause and we can kind of take many number of doors.

We have everyone here that can talk through the revenue options.

So one option is we can talk through all those just so you can see everything and and and have it.

And then I've asked Stacey to give some thought about um what was some additional processes, some conversation with council be like around how we set some sideboards around either revenues or expenditures, reductions, not reductions, use of reserves, not use of reserves.

There's lots of different ways you can go that might help us get a little closer to where everybody is uh on things.

So I'll put that out there as well.

So I'll start and kind of set the stage a bit.

And go ahead, Owen.

I think you're driving.

So as you all know, you've seen this many times, uh, many times.

Our work is rooted in the comprehensive plan, and it's the community's plan.

It's the it's our it's our vision and focus for the work that we do with the City of Olympia.

It's a big document, and we uh have broken it down into focus areas to kind of keep us um in an easy way to communicate what we're doing.

And uh, in fact, our work with PBB will be able to break it even further to show the community how we spend our money in each of these areas, which is kind of where we're heading.

We work on our budget all year.

We work on our priorities early in the year, measuring um how we're doing through tools like surveys, and then when we get into the fall, the time that we are now, we start to move into the more formal budget process leading to a formal budget proposal and approval in November and December.

So what's really important is about this year in particular is we've been talking about budget since your January retreat and kind of staying engaged on what the path forward looks like and um and knowing where where we got to go.

This is just a reminder that when we launched our last community survey in 2023, the community told us that the top five priorities that we should be focused on from their view are housing homelessness, public safety, economic development, transportation, and climate.

Um consistently have been over the last couple of surveys, kind of our top five um priority areas we've heard from our community on through through survey work.

So before we get into 2026, I I want to recap where we've been because I think as I said, it helps set the stage kind of for where we're gonna go.

We balanced our budget in 2025 with the use of fund balance or one-time monies, which means that although we did make reductions last year, which I'll talk about in a minute, we knew going into this year we had more work to do to close our budget gap through new revenues or further expenditure reductions because we use, as it turns out, almost uh around $5 million total to get our way through 2025 with um with uh changes that have come about since you adopted your budget.

Um we are got a use of about $5 million of fund balance, which means that we start this year in the whole four or five million dollars because we used one time monies last year.

In terms of reductions, and you can keep right on going, Owen, um we eliminated 17 general fund positions along with some other reductions in frozen positions, which saved us about 3.2 million dollars for 2025.

So we did a lot of hard work.

Um what's not shown here is we also cut some other positions in the development fee fund um to help bright size that fund so it's not as reliant on the general fund.

Uh in total, it was well over 20, about 25 positions in total, I believe, that we reduced last year in total.