Snoqualmie sees $3.5 million positive opening-balance variance; North Bend police contract loss raises budget uncertainty

Jana Walker, Snoqualmie budget manager, told the Finance & Administration Committee on July 14 that the city’s 2025 opening balances were roughly $3.5 million higher than estimated when staff prepared the 2025–26 biennial budget and laid out several uncertainties that could prompt later budget amendments.

The variance is largely revenue-driven: Walker said the city expected about $39,000,000 in opening balances and “we came out closer to 43,000,000, which is a $3,500,000 positive variance for the city as a whole.” She attributed the single largest early receipt to a settled lawsuit — “about $500,000” — and also cited higher-than-expected interest income and some underestimates in engineering services and ground emergency medical transport revenue.

The gap gives the city some short-term flexibility but does not eliminate risks, Walker and committee members said. The committee heard that the city has an internally revised budget prepared after the decision by North Bend to end its police services agreement with Snoqualmie; Walker said staff reduced expenditure appropriations and froze a small number of positions to try to meet revised savings targets but emphasized the outcome remains uncertain.

Walker described the North Bend transition as a material driver of the fiscal uncertainty. "This is the one that I would expect to really see turnaround as we have folks leaving that department of their own volition," she said, noting vacancies and overtime will affect final costs as the two departments unwind.

Committee members asked about areas already running above the 50% midyear benchmark. Walker pointed to administrative accounts that pay a large annual citywide insurance premium (about $1,000,000) that is recorded early in the year and to an administrative account showing roughly 56% spent at midyear under the approved appropriation. She said staff proposed reductions in the internally revised appropriation and had frozen three positions in that department to help bring spending in line.

On capital funds, Walker said several nonutilities capital projects rolled forward because work completed in 2024 was less than expected. Utilities capital timing also shifted, she said, citing projects including the waste reclamation facility, Eagle Lake Reservoir and a sidewalk at 380 Fourth Avenue. She warned that a timing issue related to a bond for utilities capital requires careful sequencing of projects so funds are available without transferring between accounts.

Home-elevation funding emerged as a specific, time-sensitive item. Mona Davis, community development, told the committee she recently met with the King County Flood Control District and learned the city has funding allocated for home elevations that must be used this year or be lost. "We have funding that we could be utilizing for home elevations. We need to use it or we're gonna lose it," Davis said. She said staff will reach out to people who previously expressed interest and work with Building Official John Cooper to determine whether there is sufficient time this year to complete permits and construction.

Walker also described ongoing work that could affect revenues and long-term structure: a comprehensive fee study intended to better align fees with full cost; an enterprise resource planning (ERP) rollout (grants/contracts/project accounting started July, utility billing and business licensing to follow); and an outstanding collective bargaining negotiation with the International Association of Firefighters. She said a biennial budget report and potential amendments are likely to return to council in late fall.

No formal budget amendments or ordinance actions were taken at the committee meeting; routine procedural items on the agenda (agenda adoption, approval of minutes dated June 17, 2025, and acceptance of the claims report dated July 14, 2025) were approved by consensus earlier in the session. Walker said she would share the three presentation slides with council so the full body is aware of the current picture.

The finance staff will continue monthly and quarterly monitoring and report back to council as project timing, staffing transitions related to the North Bend contract, ERP implementation and collective bargaining developments clarify whether formal budget amendments are required.