PASCO, Wash. — The City of Pasco reported a net use of nearly $5.8 million from its general fund reserves for the second quarter covering April through June, city finance staff said at the Aug. 4 council meeting.

The disclosure came during a presentation by Director Garcia on the citywide second-quarter financial report for the 2025 fiscal period. The report said the general fund shortfall reflected twice-yearly debt service payments and capital expenditures, while special revenue funds posted a combined positive impact of about $2.4 million.

City staff told council that utilities—water, sewer and irrigation—showed a $22 million positive impact in the quarter, largely because of assessments tied to a sewer local improvement district (LID) of close to $15 million. Internal service funds, which include fleet and the city’s medical and dental plans, showed a net loss of roughly $2.2 million largely driven by delayed medical claims coming due this year.

The finance presentation noted that sales tax revenue is slightly under budget and that gambling tax receipts are down versus the prior year, but staff said some of the gambling decline appears to be timing and self-reporting issues and that an audit of vendors is underway. Director Garcia said state software delays also affected fuel-tax distributions to the city’s street fund.

Councilmembers asked for clarifications about loan proceeds reflected in utility funds and about potential mid‑biennium budget adjustments. Staff said some low-interest loans have been awarded but not yet contracted and that many loans operate on a reimbursement schedule—money is requested as capital is spent. Garcia told council a mid‑biennium amendment is being prepared and that department managers are working on lean-process savings to reduce reserve draw later in the budget cycle.

On reserves, staff said the $5.7 million draw includes amounts allocated for bond-funded capital that were already programmed for transfer. Council members and staff agreed the city remains generally healthy but that the use of some reserves was expected under the biennial plan.

The council did not take any vote related to the report; staff said they will return with additional detail during the mid‑biennium review and follow up on specific items such as the gambling tax audit and ambulance/federal funding changes.

Ending: Staff said work will continue on grant and loan management, medical-claims catch-up, and preparing a mid‑biennium amendment; councilmembers asked staff to return with follow-up on the gambling revenue audit and on whether fee programs (for example, false-alarm or transport fees) should be adjusted.