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Federal Way council reviews budget amendment, city finance director urges cautious revenue assumptions
Summary
The Federal Way City Council heard a presentation on a proposed amendment to the 2025–2026 biennial budget, including new grants, facility purchases and funding to cover recently negotiated labor contracts; staff proposed using unrestricted utility-tax revenue and a modest downward adjustment to sales-tax forecasts to cover costs.
City of Federal Way finance staff presented a proposed amendment to the 2025–2026 biennial budget and asked the City Council to advance the ordinance for a second reading on June 17.
Steve Groom, the city’s finance director, told the council the amendment groups several items: carryforwards from last year, newly awarded grants, approved contracts and planned purchases that require appropriation. "We try to to amend the budget, 3 times during each year," Groom said, describing the routine process and the specific items staff wants added to the current appropriation.
Groom identified several items the amendment would add: the previously approved acquisition of a Steel Lake property (about $400,000) funded from surface-water and park capital balances; an uninterrupted power supply and batteries for the Performing Arts Center; $33,000 in farmers-market equipment; architect costs for the community center locker-room project; and IT items including camera installations, permitting software work and a server-cluster replacement.
On the revenue side, Groom said the city expects higher-than-budgeted receipts for some programs — including the farmers market — and additional right-of-way revenues. To cover recently negotiated collective-bargaining agreements (including retroactive pay dating to 2024), he proposed relying on unrestricted utility-tax receipts. "The revenue that I proposed to use to cover the collective bargaining agreements is just the unrestricted portion," Groom said, noting that those utility-tax receipts have been steadier than sales tax so far this year.
Groom also recommended a modest reduction to the city’s sales-tax projection to be conservative: "Sales tax, however, is a different story... I think it's prudent and cautious just to bring sales tax down a little bit," he said.
The council held a public hearing and then moved the ordinance — Council Bill 912, the 2025–2026 biennial budget amendment — to a second reading and possible enactment at the June 17 meeting.
Mayor Jim Farrell and several council members questioned and discussed the proposed amendments during the hearing. No final adoption occurred that night; the council set the item for further consideration on June 17.
