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Port Angeles council begins 2026 budget goals discussion; staff urges conservative revenue assumptions
Summary
City staff told the Port Angeles City Council on July 1 to expect a conservative 2026 budget after mid‑year 2025 revenues trended below the prior year; council members identified public safety, parks funding and tourism‑related fees as potential priorities.
Port Angeles — City staff briefed the council on financial trends and solicited policy direction for the 2026 budget at a July 1 work session, urging a conservative revenue outlook after mid‑year 2025 collections trended below 2024 levels for several major revenue sources.
Finance and budget staff summarized mid‑year receipts: property tax collections were about 2.3% below 2024, sales tax about 5.3% below and utility tax about 1.2% below, though some line items such as lodging tax and real‑estate excise tax were above budget expectations due to timing and a large building permit. Staff said utility funds remain at or above reserve targets except for the solid‑waste fund, which is rebuilding.
Staff reiterated city financial policies: do not use one‑time revenues for ongoing expenditures, maintain a 25% general fund reserve and use conservative revenue assumptions when building the next year's operating budget. Staff also noted real‑estate excise tax and restricted reserves already committed to capital projects and collective bargaining obligations that will affect the 2026 budget.
Council members discussed priorities and revenue options. Recurrent themes included: maintaining and growing public‑safety staffing (police and fire) to address calls, vandalism and traffic enforcement; advancing Phase 2 of the business licensing program that would direct funding to downtown services; exploring tourism‑related fees (including potential lodging or visitor impact fees and cruise visitor fees) and fee‑in‑lieu opportunities from federal partners such as Olympic National Park; and considering targeted tools such as tax increment financing (TIF) for infrastructure investments.
Several council members urged caution about new taxes now — the leadership group and many council responses to a staff survey recommended not advancing a border‑area fuel tax at this time — while also asking staff to research alternative revenue sources, grant capacity, public‑private partnerships and regional collaboration opportunities. Council asked staff to return with a summary of discussion and research to the next meeting, and staff agreed to present a preliminary balanced budget in October with a formal work session Oct. 28.
What’s next: staff will continue departmental budget entry through July and August, conduct manager review meetings in late August, and provide a preliminary budget for council and public review on Oct. 3 with a work session on Oct. 28. Council asked staff to return with a summary of tonight’s discussion and additional research on several revenue and program options.
