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Anacortes council adopts 2025 year-end budget amendment after finance director warns of reserve use
Summary
The Anacortes City Council approved Ordinance 5016, a 2025 year‑end budget amendment, after Finance Director Steve Hoagland reported the general fund will rely on approximately $1.4 million in reserves under the current 2026 budget and proposed reallocation of property‑tax allocations to shore up the general fund.
The Anacortes City Council voted unanimously Jan. 26 to adopt Ordinance 5016, a 2025 year‑end budget amendment that adjusts fund budgets and authorizes carryovers for a series of projects and staffing changes.
Finance Director Steve Hoagland told the council the city collected roughly in line with projections in many revenue streams, though the general fund is projected to use about $1.4 million of cash reserves in 2026 under current allocations. “We ended up collecting about 6% more than what we budgeted,” Hoagland said, but he warned that timing and one‑time revenue differences leave the general fund on a “thin edge.”
Hoagland reviewed major revenue streams and fund activity, noting particular one‑time movements in utility tax, real estate excise tax and lodging tax receipts. He said the city’s street construction fund showed a temporary negative cash position at 12/31/25 because grant drawdowns occurred after expenditures; the negative cash position is timing‑related and the fund maintains a positive fund balance.
To address the projected general‑fund shortfall, Hoagland proposed respreading property‑tax allocations so the general fund receives more of the property‑tax apportionment for 2026 while parks relies on built‑up reserves in the short term. He said staff will bring a first‑quarter budget amendment with detailed reallocation proposals.
Councilmember Fantini moved to approve Ordinance 5016; after discussion, the council took a roll call vote. The clerk recorded five ayes and zero noes, and the ordinance passed.
The budget amendment included adjustments to parks utility budgets and Washington Park activity, $24,000 in cemetery professional services for a hazardous‑tree removal, additional staffing and professional services in ACFL/Curtis community forest land funds, and carryover authority for several equipment purchases that arrived in 2025.
Hoagland and councilmembers emphasized the difference between ongoing and one‑time revenues and the need to avoid repeated reliance on reserves. Councilmembers asked staff to provide clearer formats for budget documents in the quarter‑one amendment and to list steps the city is taking to improve the budget position.
Next steps: staff will return with the Q1 budget amendment documenting the property‑tax respread, the formal ratification of personnel changes, and the individual fund adjustments included in Ordinance 5016.
