I'd like to call to order the city council study session of September 10th, 2024.

Clerk, will you please call the roll?

Councilmember Bushnell.

Present.

Councilmember Daniels.

Councilmember Diaz.

Deputy Mayor Hines.

Councilmember Rumbaugh?

Here.

Councilmember Sidalga.

Here.

Councilmember Scott.

Here.

Councilmember Walker.

And Mayor Woodard.

Here.

Council members and mayor, your items were delivered at 11 a.m.

today.

Wonderful.

All right, we're gonna go ahead and jump in.

Our first agenda item today is the general fund 2024 through 2026 financial outlook.

So I'd like to call on city manager Elizabeth Pauley to begin the presentation.

Thank you, Mayor.

And Mayor and Council.

Today we're gonna do a little bit of an update for you on a couple things related to our budget.

As you know, we're in budget development, and the um city manager's proposed budget will be presented to you on the first of October.

But we wanted to do a couple things today.

We wanted to give you an update on the general fund gap.

Um this is um of the forecast that's based on um some trends that we've seen over the course of the summer in um revenues and expenses.

So we're gonna be updating that information for you.

Last time we talked to you about the gap was back in June, I believe.

We're also gonna take uh a chance today to highlight some of the revenue options that I will be recommending in the budget to balance the general fund um for the 2025-26 proposed budget.

Some of those revenue options, and we've talked about some of those in our check-ins, but some of those revenue options will involve council actions and so and some committee work as well.

So we wanted to come um to you as a as the whole council today to highlight some of these to bring awareness to them and to remind you that we are scheduled a committee in October to review those in a little bit more detail as we continue with our budget development.

And before I turn it over to Katie to go through the presentation with you today, I just want to take another chance to thank um Katie and her budget team.

This is a really really busy time of year for them, and they're just um continuing to just do excellent work and putting this, helping me put this budget together.

So, Katie.

Thank you.

Um, so today what we're gonna do in our walkthrough.

Uh, is we'll start with an update um on 2024 year to date.

Um, as the city manager mentioned, um we last presented to you in June, and so we just want to talk about some updates as we review, particularly revenues um through this year and how that may or may not impact um our projections for 25-26.

Um, we'll we'll also take a chance to then talk about the gap and the gap going into this fall because that updated gap then is really um what we're using uh to talk about how the proposed budget addresses the gap that you'll see today.

So that's what Elizabeth will be presenting, and as um the city manager mentioned, we'll also um take a moment to go through some of the revenue options that will be coming forward with the proposed budget.

All right, so um the update on the general fund um through July is shown here.

So, first going through revenues.

Um, what you'll notice is that actually through July we have um just over eight million dollars in positive um revenue variants.

Some of that though we anticipate to go away by the end of the year, and that's just through corrections that happen with how we are tracking our revenues.

Um the ones shown here are truly ones that I think we can include as part of our forecast for resources available on a one-time basis to help in 25-26.

Um, so what you'll see is that we've had a positive one-time revenue due to a power gross earnings tax audit um of 1.8 million dollars.

Additionally, we've been experiencing the same trends that we saw through the first quarter of the year of 1.5 million dollars and interest earnings and BO tax uh collections of $3.3 million.

The reason why you'll hear me talk about these as a one-time um item that we can anticipate helping as we go into the 2526 process, is because these trends are in line with the assumptions that we brought forward to you in June for 2526 revenues.

So, actually, in the last quarter, we've really seen no change um in our revenue collections that would mean that we think we should be updating revenues for 2526.

So those will stand at the amounts presented um in June.

In terms of expense updates, two items that I just want to bring forward to council's attention is that Cheney Stadium received $3 million in capital improvement funding from the Washington State Department of Commerce.

That $3 million helped address a $5 million capital project that they were able to do at Cheney Stadium.

The improvements were to the stadium's seating bowl support systems and structure, as well as to improvements to visiting team locker rooms that are required for the reineers to keep their MLB affiliate status.

And because of that, the city then needed to make a contribution to match those state funds for the remaining amount of two million dollars.

So that was an unanticipated expense for the city's general fund.

So we will now need to be planning for that contribution to happen.

And then we also have experienced some higher than anticipated trends, particularly in workers' compensation as well as liability risk.