Sunnyside City Council on Dec. 29 adopted the city's 2026 fiscal year budget, a 2026 classification and compensation schedule and several related budget-management steps after several hours of questions about staffing, utility rates and accounting practices. The ordinance the council approved sets the total 2026 budget at $50,065,242.63.

The budget vote followed a detailed presentation by Monica Hofstadter, who staff introduced to review the budget books distributed to council on Dec. 12. Hofstadter told the council the proposed general fund includes a $1,000,000 transfer-in from a bond maturing in March and a second $1,000,000 maturing in September; she said the city can draw temporarily from the Local Government Investment Pool (LGIP) and then replenish it when bond proceeds arrive.

"We would bring back a budget amendment in the first quarter of this year," Hofstadter said, explaining staff will complete reconciliations and return to council with any adjustments. Councilor Hart said he was wary of treating the not-yet-received bond funds as current revenue. "So, in fact, with that money not actually being in our hand, the budget's not balanced?" Hart asked. Hofstadter and the city manager responded that the city can draw from cash reserves and will present a formal amendment after Q1 reconciliations.

Councilors also approved a targeted hiring freeze through the first quarter while allowing exceptions for essential positions. Several council members, including Councilor Costa and Councilor Vasquez, pushed for a broad freeze to rein in personnel costs. City staff recommended permitting internal backfills for critical supervisors and two positions (code enforcement and animal control) were singled out for close consideration because leaving them vacant would affect enforcement and public services.

Utility and garbage rates were a principal point of debate. Councilors pressed staff on a proposed 5% increase to garbage and other utility rates; staff explained Yakima Waste's landfill pass-through is roughly 2.93% and the city must add additional percentage points to recover prior subsidies and the city's operating costs. "We can't afford to subsidize 1000000 dollars every year," the mayor said, summarizing staff's explanation that the general fund had been subsidizing utilities by about $1.6 million and that the rate increases aim to make the utility funds self-sustaining.

Council also discussed operational changes to hold down future rate pressure. Chief Lehman (police chief) told council he is preparing a January cost comparison for transferring dispatch services to the Yakima County Sheriff's Office; preliminary estimates show roughly $200,000 in annual savings if the council directs the transition.

Councilors reviewed several accounting and allocation questions, including the equipment-rental special revenue fund (Fund 501) with a beginning balance around $950,000 and staff's recommendation to use the fund more for capital equipment and repairs than for wages. Staff said recent union settlements produced back pay and step increases that pushed personnel costs higher in several departments, contributing to year-over-year increases.

After extended discussion and requests for additional quarterly reporting, Councilor Hart moved to adopt the budget ordinance; Deputy Mayor Galvan seconded. The council conducted a roll-call vote and the budget passed. Council then voted to adopt the 2026 classification and compensation schedule, which updated pay scales to reflect current CBAs and minor corrections requested by council.

The council announced an executive session under RCW 42.30.110(1) to discuss the minimum price for a sale or lease of city property; no action was expected and none was taken in open session. Councilors directed staff to return in the first quarter with reconciled beginning/ending fund balances, any proposed budget amendments, and follow-up materials on the hiring-freeze exceptions, RCW references for special funds, and the dispatch cost study.

Votes at a glance: the ordinance adopting the 2026 budget (total $50,065,242.63) passed on a roll-call vote with council members voting yes; the 2026 classification and compensation schedule also passed on roll-call vote.