Wenatchee officials flag $2 million recurring shortfall; 0.1% public safety sales tax floated

Finance Director Brad Hoskenk told the Wenatchee City Council Tuesday that the city’s preliminary 2026 general fund shows a structural shortfall driven largely by rising jail, public defender and insurance costs.

Brad Hoskenk, finance director for the City of Wenatchee, said the city’s total net income in the proposed budget appears as a $1.2 million deficit on paper but that recurring revenues are short by “almost $2,000,000,” leaving a structural gap once one‑time items are set aside.

The shortfall stems from several recently identified cost increases: a pending increase in the county jail contract that staff estimated could be between $600,000 and $1,000,000 over two years; roughly $400,000 in higher public defender costs tied to state caseload limits; and about $600,000 in higher insurance costs, Hoskenk said. He also noted the expiration of a $430,000 grant that had funded part of a traffic safety unit and a decline in investment interest revenue because the general fund is cash‑flowing capital projects.

Why it matters: Hoskenk said the shortfall threatens the city’s ability to maintain current service levels without using one‑time reserves or cutting services. He presented options and asked council for guidance ahead of the statutory schedule for adopting a preliminary budget in November.

One option the city will consider is a public safety sales tax authorized by the state legislature earlier this year. Hoskenk said a one‑tenth of 1 percent sales tax (0.1%) could generate roughly $1.2 million for the general fund if enacted and implemented April 1, 2026, because it would not cover a full year in 2026. He said that same rate could produce about $1.6 million in a full year thereafter; staff estimated the tax would cost an average household about $20 annually, assuming $20,000 in annual taxable purchases.

Council members asked for details on tradeoffs. Several members said they preferred raising revenue over cutting services; others asked for scenario modeling that would show exactly which positions or programs would be affected by various reductions. Hoskenk identified near‑term risks if the council delays or declines revenue measures: unfilled positions that would increase workloads across departments, deferred IT and phone system replacements that could cause outages, and potential reductions to parks and other city services.

Hoskenk outlined the next steps: staff will solicit council direction, present a preliminary budget on Nov. 1, provide a recommended final budget on Nov. 6 and return for adoption on Nov. 20, consistent with state timelines. He said staff and the mayor want council input in the coming weeks on whether to place the public safety sales tax ordinance before the council in November.

Ending: Council members and staff agreed to continue discussions; no ordinance or formal vote was taken Tuesday. Hoskenk asked members to provide feedback in the coming days so staff can refine the budget and any proposed revenue measures for the November meetings.