Get Full Government Meeting Transcripts, Videos, & Alerts Forever!
Get email alerts on the Q1 Financial Report topic
No spam. Unsubscribe anytime.
Sequim finance director flags street fund shortfall and tourism‑linked revenue dips in Q1 report
Summary
The city’s Q1 financial review showed salary and benefit timing pressures, the street operations fund below policy minimum, a classification change required by the state auditor for a flexible spending account, and early signs of tourism‑linked revenue softening; water connection fees have increased year‑to‑date.
Finance Director Sue Hagener briefed the Sequim City Council on the city’s financial performance through the first three months of 2025, describing several items staff will continue to monitor and possible future budget action.
Hagener said she does not place too much weight on a single quarter but identified three areas of concern: salaries and benefits are running over budget in some departments — she attributed that in part to late ratification and timing of a negotiated contract that was signed in late December 2024 — the street operations fund balance has fallen below the city’s policy minimum, and the state auditor has recommended reclassifying a flexible spending account that will require a future budget amendment to correct fund classification.
Hagener told councilors that tourism‑sensitive revenues showed early weakness: a notable drop in hotel‑motel tax revenue (reported in April for activity in February) and a small decline in sales tax receipts. She cautioned that March/April results can be volatile and that staff will continue monitoring trends into the second quarter before recommending corrective action.
Councilors asked about property‑tax timing and impact fees. Hagener explained property‑tax receipts are difficult to predict from month to month because Clallam County forwards collections on an irregular schedule; she said the majority of property‑tax receipts typically arrive in spikes in April/May and October/November. On development revenue, Hagener reported strong water general‑facility charges (GFCs): “not even June yet, and we’ve hit half a million dollars in water GFCs,” which she described as excellent news for utility finances.
Hagener said staff may return later in the year with a budget amendment if trends do not correct, and that she will present a fuller second‑quarter financial review after June 30.
