County staff present proposed 2026 internal rates; auditors flag 2027 true‑up pending TC Connect closeout

Thurston County staff briefed the Board of County Commissioners on July 16 about proposed 2026 internal service rates and the county cost allocation plan, outlining projected increases across central services, facilities, fleet, IT, human resources and risk insurance and noting a planned 2027 true‑up once year‑end accounting data is finalized.

Assistant County Manager Jennifer Walker introduced presentations from central services fiscal staff, facilities and fleet managers, IT director Sherry Ilg, Human Resources director Marie Conte and Risk and Safety manager Bridal Bishop. Central Services staff said the central services portfolio (records, mail, procurement, facilities maintenance and building reserves) is projected to increase roughly 13.1 percent overall from 2025 to 2026; building reserves were cited as increasing about 9 percent (including a 3 percent inflation adjustment and a new building addition), and facilities maintenance and operations were shown rising about 12 percent, in part because of property insurance and vendor cost increases.

Fleet services figures showed a significant increase in the equipment reserve (31 percent) tied primarily to added vehicles for the Sheriff’s Office and more heavy equipment (heavy duty trucks up about 20 percent; slope and shoulder mowers up about 39 percent). Staff said vehicle and equipment charges are charged to the offices that own or operate those assets; departments with equipment added for public safety will be charged accordingly and staff noted public safety sales tax offsets will be applied where appropriate.

IT Director Sherry Ilg said IT rates are projected to increase about 9 percent in the general fund, driven by staffing increases, additional buildings to support, onboarding of new applications and a $7.6 million annual licensing/maintenance baseline for software and services. IT’s infrastructure reserve fund increase (about $400,000) was attributed to higher hardware costs (an average cited increase of 27 percent) and the need to catch up on replacement funding collected in prior years.

Human Resources reported no rate increases proposed for the benefits administration fund or the leave buyout fund for 2026. HR said the leave buyout fund (created recently to help offices absorb large retirement cash‑outs) pays 25 percent of a retiring employee’s cash‑out; staff reported the fund had reimbursed departments about $55,000 to date and expected to pay roughly $111,000 by year end.

Risk and Safety staff said the county’s risk fund would show a month‑to‑month allocation increase equivalent to about 16 percent (explained in presentation as a one‑year comparison after an anomalous 15‑month premium paid in 2025). Staff and the risk pool broker flagged that the pool may require larger increases—broker estimates presented to staff indicated a possible 25 percent increase—because the pool’s reserve has been depleted and because of a wave of historic abuse claims affecting multiple counties and juvenile detention facilities statewide.

Auditor Ronald Haney presented the county cost allocation plan, which allocates general fund internal service costs to user funds. The draft plan for 2026 shows the general fund collecting about $8.5 million (an increase of $168,000). Haney and budget staff cautioned that TC Connect year‑end closeout remains incomplete; the 2026 plan uses a conservative 2 percent placeholder and staff said a 2027 “true‑up” adjustment will be required when final 2024/2025 actuals are available.

Staff said departments will receive detailed impact statements and will incorporate the rates into 2026–27 budget development; staff also said a first quarter budget amendment will be used to adjust any amounts that differ from interim estimates.