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Redmond staff report steady Q1 finances; deputy director flags economic uncertainty
Summary
Deputy Finance Director Hrutha Narn told the council May 20 that first-quarter 2025 revenues and expenditures are tracking largely as expected, with strong sales tax receipts but caution about national indicators and potential stabilization in development-related revenues.
Deputy Finance Director Hrutha Narn told the Redmond City Council on May 20 that first-quarter 2025 revenues and expenditures are generally tracking as expected, although national indicators point to economic uncertainty.
Narn said King County economic forecasts show slower growth and cautioned that inflation in the Seattle area may remain above the national average. She said Redmond’s sales tax collections remained strong through the first three months of 2025 and that assessed values aligned with budget assumptions.
The report noted a slight decline in one-time sales tax and development-permit revenue compared with recent surge years, which staff said reflects stabilization after a period of unusually high development activity tied to large projects. Narn said some revenue categories—licenses and intergovernmental revenue—appear under target due to timing and that grants often show little in Q1 because of reimbursement timing.
On expenditures, Narn said overall spending was trending as expected through March. She introduced a new quarterly slide on citywide overtime and said fire overtime would be reviewed separately in the public safety committee. She also said capital investment program (CIP) spending tracked at about 6 percent year-to-date and that a delay in an interfund transfer explained an overage in the capital investment delivery offer that staff expects to correct in Q2.
Council members asked for follow-up detail. Council member Steve Fields questioned what operating reserves were used for; Narn said the apparent draw reflected a combined offer that included the capital equipment replacement fund and one-time purchases such as laptops ordered early to avoid tariff impacts. Council member Stewart asked staff to add target columns next quarter for clearer comparisons and requested tracking of new revenue initiatives such as grant-writer performance, a 1% utility program, and business-license auditing results.
Narn said the city is preparing a contingency plan and will notify council promptly of any significant revenue declines. The council did not take action on the report; it was presented for information and follow-up.
