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City manager outlines options to balance 2026 operating budget; council sets broad guardrails
Summary
City Manager Jay Birney presented options to address the 2026 budget, including revenue measures, operational efficiencies and possible reductions. Councilmembers largely agreed on preserving frontline public safety and avoiding deep cuts to core services, and asked staff to return with options and estimates as fiscal forecasts firm up in August.
City Manager Jay Birney briefed the Olympia City Council on June 24 on the city—s fiscal position and potential approaches to balancing the 2026 operating budget, asking for council guidance on priorities and guardrails for any reductions.
Birney told the council the city balanced its 2025 budget using $4,000,000 in reserves and that the general fund reserve rate has declined; he noted the city—s target fund balance is 25% while current reserves were at about 12.5%. "We balanced our 2025 budget utilizing $4,000,000 in reserves," Birney said, and described a menu of short-term and longer-term options staff has developed to reduce or offset a 2026 shortfall.
Why it matters: councilmembers emphasized that reductions to frontline public-safety staffing would be particularly harmful and that core, "essential" municipal services should be prioritized. Several members said they preferred revenue or efficiency options over service reductions and asked staff to bring specific, quantified options before the…
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