Federal Way council hears finance briefing, approves CDBG plan and mid‑biennium budget amendment; property tax ordinance passes 6–1
Get AI-powered insights, summaries, and transcripts
Subscribe
Summary
On Nov. 5 the council reviewed a monthly financial report, discussed revenue shortfalls and cash balances, approved the 2026 CDBG annual action plan, and passed a mid‑biennial budget amendment. The 2026 property tax levy ordinance passed 6–1; Councilmember McDaniel cast the lone no vote.
The Federal Way City Council considered several finance items on Nov. 5, including the monthly financial report, a mid‑biennial budget amendment and the 2026 Community Development Block Grant (CDBG) annual action plan.
Finance Director Steve Groom briefed the council on year‑to‑date revenues and cash balances and noted material variances from budget. "The shortfall in the current year is 767,000. That's about 6% unfavorable to budget," Groom said, pointing to sales tax underperformance relative to the adopted budget while noting sales tax remains slightly ahead of last year. Groom also cited an interest‑revenue shortfall (about $394,000) and explained that uneven timing of property‑tax receipts and bond payments affects monthly cash flows.
Council action and staff discussion
- Consent agenda: Council approved consent items (minutes, vouchers and several contracts) and, after a short presentation, approved the monthly financial report (item c) by voice vote. - CDBG annual action plan: Staff confirmed two required public hearings (Oct. 14 and Oct. 21) and no written comments. Council approved the 2026 CDBG annual action plan unanimously. Staff and council discussed using contingency funds (about $132,905) and directed Human Services staff to explore a standalone solicitation so funds could be prioritized to home‑repair programs (Habitat for Humanity was discussed as a potential recipient) while ensuring timely expenditure in compliance with HUD rules. - Mid‑biennial budget amendment: Council approved the 2025–2026 mid‑biennial budget amendment (ordinance) on second reading. The measure passed without recorded opposition. - Property tax levy: Council passed the 2026 property tax levy ordinance (second reading) by a 6–1 vote. Councilmember Paul McDaniel recorded the lone "nay."
Why it matters
The finance briefing showed modest revenue shortfalls relative to budget projections and highlighted the city's reliance on reserves and careful spending to maintain fiscal balance. CDBG funds support human services and housing programs; council directed staff to explore an expedited opportunity to apply contingency funds to urgent housing repairs while observing HUD timeliness rules.
What to watch next
Staff and the Human Services Commission will evaluate whether a targeted solicitation can be run to allocate contingency CDBG funds for home repairs without jeopardizing HUD timeliness requirements. Finance staff said they will continue to monitor sales‑tax collections and other revenues and alert the council if further budget adjustments become necessary.
Quotations
- Steve Groom (Finance Director): "The shortfall in the current year is 767,000. That's about 6% unfavorable to budget." - Angelina (Community Services Manager): noted HUD timeliness requirements and recommended any contingency allocation be structured so the city can meet federal expenditure deadlines.
Votes and formal actions (high level)
- 2025–2026 mid‑biennial budget amendment (ordinance): approved on second reading (unanimous). - 2026 property tax levy ordinance: approved on second reading (6–1; McDaniel opposed). - 2026 CDBG Annual Action Plan: approved unanimously.