Olympia Finance Committee Approves 2026 Rates and Fees, October 20, 2025
Olympia Finance Committee Meeting – October 20, 2025
The Olympia City Council Finance Committee met on October 20, 2025, from 4:05 p.m. to 6:58 p.m. in Council Chambers. All three members (Chair Clark Gilman, Committee members Jim Cooper and Kelly Green) were present. The committee approved the September 15, 2025 minutes and received presentations on the property tax snapshot and the Tax Review Team’s progress. The main action was a unanimous vote (3-0) to forward to the full City Council a package of recommended 2026 utility rates, general facility charges, impact fees, and special revenues covering Inspire Olympia, lodging tax, Parking & Business Improvement Area (PBIA), and Housing/Homeless Response program budgets. The Finance Director also briefed the committee on budget-balancing recommendations from the October 14 Council Study Session.
Consent Calendar
- Approval of the September 15, 2025 Finance Committee meeting minutes.
Public Comments & Testimony
- No public comment was offered.
Discussion Items
- Property Tax Snapshot (6.A): Senior Budget & Finance Manager Joan Lutz presented Washington State’s property tax system, explaining that the levy rate is a pure math equation (levy amount ÷ assessed value ÷ 1,000). State law caps annual property tax growth to 1% or the implicit price deflator, whichever is less. For the City of Olympia, the city’s direct levies (including the fire bond and Olympia Metropolitan Park District) account for about 24% of total property taxes. The committee discussed the inverse relationship between levy rate and property values.
- Tax Review Team Update (6.B): Accounting Manager Thomas Donnelly, Tax and License Lead Brandie Andrews, Auditor Nathan Wilkinson, and Program Assistant Sierra Jorgensen reported on the team’s first 18 months. Compliance efforts: In late 2024, 543 notices generated $143,000 in revenue; in 2025 through September, over 1,500 notices generated nearly $600,000. Tax reviews: 21 completed with 20 in pipeline, producing about $475,000 in assessments. The non-filing rate fell from 44% (2023) to 41% (2024) overall; quarterly filer non-compliance dropped from 16% to 12%, annual filers from 50% to 45%. On-time filing improved: quarterly filers from 44% to 58%, annual filers from 42% to 48%. The team is re-engaging with the Boltz online filing system and budgeted $50,000 for education and outreach. Discussion included the revenue’s treatment—committee members noted that compliance revenue is not new money (it was always owed) and expressed interest in directing funds to Olympia Strong economic development, though no formal commitment was made.
- 2026 Rates, Fees, and Special Revenues (6.C): Presenters covered multiple areas.
- Utility Rates: Interim Water Resources Director Gary Franks presented wet utility budgets. Budget drivers included HRCC salary increases, higher insurance costs, and reduced capital transfers. Proposed rate increases: Waste 4%, Drinking Water 3%, Wastewater 3%, Storm & Surface Water 7.5%. The average residential bi-monthly bill would rise $12.04 (3.74%) to $334. GFCs increase 5% across the board. A multi-year rate study is beginning.
- Impact Fees: Tim from CPED explained transportation impact fees (proposed 10% increase, single-family to $5,271, multifamily to $2,982), park impact fees (2.9% inflationary increase), North Thurston Public Schools fees (decrease to $1,847 for single-family, with bedroom-based reductions), and Olympia School District fees (remain at $0). Transportation fees are about 33% below the state average of $5,486.
- Parking Services: Ton Jeffers proposed a 25-30% increase in citation fees (first increase since 2020) to cover rising costs and reduce general fund subsidy. The committee discussed PayByPhone app outages and pop-up ads; staff will seek reimbursement for lost revenue and explore ad-free options.
- Lodging Tax & Inspire Olympia: Amelia Leighton reported on lodging tax: 39 applications (largest ever) requesting $1.77M; LTAC recommends funding 31 for $1.00M plus $234k in multi-year contracts, drawing on reserves. Inspire Olympia Manager Mary Grace Good presented the cultural access fund: revenue $3.4M, with a planned spend-down of surplus from $600k to $500k by 2029. Challenges include grant cycle alignment and growing administrative volume.
- PBIA & Housing/Homeless: The PBIA rate is proposed at $0 for 2026 pending consultant evaluation; flower baskets were not yet included but could be added. Housing Division Manager Cinda Stelchis and Homeless Response Coordinator Kim Condrat reviewed fund 142 (home fund) where expenses outpace revenues by $700k due to reduced commerce grants. CDBG funds are blocked by new federal grant agreement language; the city intends to join a lawsuit to access $341,000. Homeless response faces unbudgeted cleanup costs (e.g., $190k for hazardous tree removal, $100k+ per phase at Percival encampment) and the need to relocate Plum Street Village tiny homes. The “Jungle” encampment remains unfunded; a regional work plan is under development.
- Reports and Updates (7): Finance Director Michael Githens summarized the October 14 Council Study Session consensus: moving forward with a public safety sales tax (ordinance Nov 3) and a B&O tax increase (Scenario Four: all categories to 0.002, retail to 0.0015, threshold to $500k). Proposed budget balancing includes $1.5M from REET, $1.2M in reductions, and revenue-neutral enhancements (e.g., additional firefighter, climate coordinator). Enhancements include bunker gear funding, jail cost increase, emergency manager, sidewalk repair team, and $200k for Olympia Strong.
Key Outcomes
- Vote: Committee Member Green moved, Cooper seconded, to approve and forward to full Council the recommended 2026 Utility Rates, General Facility Charges, Impact Fees, and Special Revenues (including Inspire Olympia, Lodging Tax, PBIA, and Housing/Homeless Response budgets). The motion passed 3-0.
- Next Steps: The Finance Director will prepare ordinances for the public safety sales tax and B&O tax increase for first reading on November 3, 2025. The full Council will hold public hearings on the utility budgets and operating budget on November 3 and 18, with final adoption scheduled for December 16, 2025.
- Directives: Staff will research options to cover CDBG grants during the federal dispute, seek reimbursement from PayByPhone for app outages, and explore removing pop-up ads from the parking app. A comprehensive parking rate study is planned after the citation fee adjustment.
Meeting Transcript
We now have our techno recording is in progress. Our technology is sorted out. Welcome to the October 20th meeting of the Olympia City Council's Finance Committee. I'll call us to order at 4.05. We have all three members of the committee here. And we have an agenda in front of us. I'd welcome a motion. Move to approve the agenda. All right. Any comments, questions, polls? No, we're good to go. All in favor say aye. Aye. All right. We have an agenda. That brings us to public comment. Do we have anybody signed up for public comment this evening? We had no one signed up online for public comment this evening. All right. Thank you. Next is there are no minutes to approve right now. We'll catch them next month. So 15th on my package. Ah, just not on this agenda. Let me see if my two agendas are different. They certainly are. Monday, October 20th. Okay. How about considering the September 15th meeting minutes? Move approval. Second. All in favor. Aye. Aye. And now that brings us to the moment we've all been waiting for. Our senior budget and finance manager, Joan Lutz, is going to give us a property tax snapshot. Good evening, Finance Committee. For the record, my name is Joan Lutz, Senior Finance Budget Manager. This presentation is going to provide an overview of Washington State's property tax system. Is that better? This presentation will provide an overview of Washington State's property tax system and the implications to the City of Olympia. Okay. Property tax in Washington State is budget-based, meaning that the amount collected is determined during the annual budget process within the state limits. The county assessor values all the property within the county while the Department of Revenue handles the inner city and utility properties. And then taxes are calculated based on property values as of January 1st in the assessment year and collected in the following calendar year. For example, 2025 assessments were just made and they will be collected in 2026. Okay. The valuation work performed by the county assessor. It looks at all real property. This is mobile and structures and land.
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