City of Olympia Finance Committee Meeting Summary - September 22, 2026

Date Note: The source agenda, minutes, and transcription all identify this meeting as having taken place on Monday, September 21, 2026, beginning at 4:30 PM. The date used in this title is provided per external directive and does not match the source material.

Committee Members Present: Chair Clark Gilman, Kelly Green, Robert Vanderpool.

The Olympia Finance Committee met to consider and approve the recommended 2027 Utility Rates, General Facility Charges, Impact Fees, and a suite of special (dedicated) revenue budgets, including Inspire Olympia, Lodging Tax, Parking & Business Improvement Area (PBIA), and Housing/Homeless Response programs. The Committee subsequently received an update on the 2027 General Fund budget balancing process, reviewing the projected deficit, department enhancements, and potential tools to achieve a balanced budget.

Consent Calendar

• Approval of Agenda: The meeting agenda was approved unanimously.
• Approval of Minutes: The minutes from the August 17, 2026, Finance Committee meeting were approved unanimously.
• Approval of 2027 Rates, Fees, and Special Revenue Budgets: Following the extensive discussion, a motion to approve and forward the entire package of 2027 Utility Rates, General Facility Charges, Impact Fees, and Special Revenues to the full City Council was made by Committee member Green, seconded by Committee member Vanderpool. The motion carried with a vote of 3-0 (Chair Gilman, Green, Vanderpool voting aye).

Public Comments & Testimony

• No members of the public signed up for comment, nor were any present in the gallery.

Discussion Items

6.A: 2027 Utility Rates, General Facility Charges, Impact Fees, and Special Revenues

The committee heard detailed presentations covering numerous funds and fee schedules:

• Lodging Tax Fund (Amelia Leighton): Estimated 2027 revenue is $1.005 million. A minimum reserve of approximately $300,000 (20% of expected contracts) is recommended. The Washington Center will now apply for competitive funding alongside other applicants due to state law changes. City Manager Jay Burney noted early discussions with the Squaxin Island tribe regarding lodging tax offsets as their property develops.
• Inspire Olympia / Cultural Access Fund (Mary Grace Gadoo): Funded by one-tenth of 1% of sales tax effective through 2029. A gradual spend-down plan is in place for a carryforward balance of $3.37 million, aiming to reach 15-20% of program obligations by 2030.
• Parking & Business Improvement Area - PBIA (Jenica Machado): No collection is planned for 2027. A phase two evaluation is underway with heavy local engagement, with recommendations expected after March 2027. The fund has a small surplus from prior years to cover approximately $27,000 in planned expenses.
• Housing & Homeless Response (Ashley Chambers): The 2027 budget projects approximately $5.3 million in revenue from over ten funding sources, with $5.2 million in expenses, resulting in a small surplus. Operational funding sustainability and the transition of the Jungle encampment were highlighted as major challenges. Councilmember Green requested that future presentations clearly separate housing encouragement/tenant protection funding from emergency shelter/homeless services funding.
• Community Development Fees & Impact Fees (Nicole Floyd): The development fee fund (006) has a projected $977,000 deficit. Staff presented options for balancing, including an 8% increase in permit fees (rather than the baseline 4.5% CPI match) and increasing the technology fee from 4.1% to 5%. A comprehensive fee study is overdue. Proposed impact fee changes include a 10% increase for transportation impact fees, while the new parks impact fee methodology (based on square footage with a minimum) is already in practice.
• Parking Rates (Mark Russell): No rate increase is proposed for on-street parking fees. Staff proposed increasing reservation fees for bagging meters to better recover coordination costs, including a $40 fee for less than 48 hours’ notice. Councilmember Green asked staff to follow up on disabling advertising prompts in the parking payment app.
• Utility Rates (Gary Franks, Ron Jones, Mike Vesey): Staff presented the proposed 2027 rate increases across all four utilities, driven largely by rising PSE power costs, increased indirect costs, and high cumulative CPI. The proposed rate increases are: Waste Resources (6.5%), Drinking Water (4.5%), Stormwater (8.7%), and Wastewater (9.5%). This results in a total average bi-monthly utility bill increase of 5.5% ($19.51), bringing the total to $353.04. Staff presented affordability metrics (EPA 2% of median household income threshold and an 8-hour minimum wage threshold), noting the proposed rates remain under both benchmarks.
  • Councilmember Vanderpool raised the concept of income-tested utility tiers to create a more progressive rate structure.
  • Chair Gilman noted that rising energy costs may shift the financial calculus for capital investments in energy efficiency and local energy production.

6.B: 2027 Proposed Budget Update

Finance Director Mike Githens and City Manager Jay Burney outlined the current state of the 2027 General Fund budget. The budget currently has a $3.8 million gap. Key elements of the discussion included:

• Enhancements: A list of Category 1 (high-need) enhancements was reviewed, including a prosecuting attorney, an event planning staffing model (to be discussed in an October 13 study session), a signs and signal operations supervisor, an HR position, climate funding (a range of $100,000 to $500,000 was presented), and an engineer position in drinking water to also support transportation projects. Staff noted that if funded, the Plum Street corridor study and downtown strategy update likely cannot be done simultaneously due to capacity.
• Balancing the Gap: City Manager Burney expressed confidence in closing the $3.8 million gap. Potential offsets include the new construction property tax levy ($200k–$700k), a surplus in the workers’ compensation reserve ($1M–$1.5M), lower than expected benefits rates, and adjustments to the development fee fund forecast.
• Interest Sweeping: A concept was introduced by staff regarding sweeping interest earnings from specific funds into the General Fund. Staff stated this is a one-time tool used by other cities and estimated a potential of over $2 million in total available interest. The City Manager recommended a conservative approach, using small amounts ($100k–$200k) annually rather than large one-time sweeps, and noted the practice would require a council ordinance.
• Year-End Projection: The 2026 projected year-end balance is approximately $2.24 million above the mandatory 10% minimum reserve.

Key Outcomes

• Approved Package (3-0): The committee approved and forwarded to the full City Council the recommended 2027 Utility Rates, General Facility Charges, Impact Fees, and budgets for the Lodging Tax Fund, Inspire Olympia, PBIA, and Housing/Homeless Response programs.
• Directives to Staff: Prior to presentation to the full council, staff will add clarifying slides, including a summary of expenditures for the Housing/Homeless Response fund and a revenue/expenses overview for the Parking Fund.
• Next Steps: A council study session is scheduled for October 13, 2026, to further discuss event planning staffing, budget balancing, and the proposed climate funding range. The preliminary budget document will be released on October 1, 2026.
• Concept Referred: The concept of interest sweeping was introduced and will be explored further by the council as a potential balancing tool.