Tumwater staff present year-to-date budget update, flag timing of property taxes and a large permit refund

TROY (finance staff) and finance department staff presented a year-to-date budget update at the Feb. 28 Budget and Finance Committee meeting in Tumwater, highlighting the timing of property-tax receipts, sales-tax projections, and an atypical building-permit refund that created a negative revenue entry in the community development account.

The presentation gave committee members a fund-by-fund snapshot early in the biennium and explained accounting adjustments intended to show a truer picture of where revenues and expenditures stand after two months.

Troy, who led the presentation, said the general-fund property-tax budget is a little over $10 million but that only about $38,000 had been posted year to date because most property-tax collections arrive in April and November. To give committee members a clearer read on performance, finance staff prorated property-tax receipts to a monthly figure of about $1.6 million. "That'll give you a truer picture of where we're at because when you first look at revenue...without the context, that looks really bad," Troy said.

Staff also described sales-tax treatment. The budget includes a sales-tax projection (listed in the spreadsheet presented to the committee) for the year; staff said the projection was developed from historical trends and other assumptions and noted that sales tax is more volatile than property tax. Troy and other staff told the committee they will monitor receipts monthly and adjust spending plans if collections fall short.

Committee members asked about downside scenarios. Council Member Agave said she was "concerned" about recent national economic uncertainty and the council's hiring commitments; staff replied that monthly reports and conservative budgeting (including vacancy-related salary savings) would guide any adjustments.

Finance staff also flagged an unusual entry in building-permit revenue: a near-$1 million permit issued in 2024 for which the city later issued an 80% refund. That refund produced approximately $759,000 in negative revenue in 2025 account listings; staff said they will accrue that refund back to 2024 so it offsets the year in which the original permit was issued. "That was a nice find going through this," Troy said about adjusting the accounting to the matching year.

In the proprietary funds, finance staff noted the water fund shows low year-to-date spending and collections because about $25 million in capital construction costs (including a maintenance/operations facility and a water-storage tank) remain budgeted but have not yet been started. Sewer and storm funds each include about $2.5 million in planned capital that likewise will depress year-to-date percentages until projects begin.

Golf operations were described as seasonal; both revenue and expenses are below the 16.67% benchmark for two months into the year, which staff said is typical for January–March.

Staff reiterated there were roughly $2.5 million in overall salary savings in 2024 from vacancies, and that of 33 new positions identified in the adopted budget only about six to seven are funded from the general fund. Finance staff said benefits already paid in the month make the current snapshot somewhat atypical and that the monthly reporting cadence will help the council track spending and revenue through the biennium.

The committee heard no formal motion on the budget update; staff said they will bring a summary report to the full council in March and continue monthly updates to the committee.

Less critical details and next steps: staff said some February receipts (for sales tax and other state-collected taxes) may still arrive from the county and will be reflected in future reports. The finance department also plans to automate the report format to reduce manual effort.