Anacortes council approves 2025 year-end budget amendment after finance update

Anacortes City Council voted to adopt Ordinance 5016, a 2025 year‑end budget amendment, after a detailed presentation from Finance Director Steve Hoagland on Jan. 26.

Hoagland told the council the city finished 2025 with generally stable revenue streams but that projected 2026 general‑fund expenditures exceed revenues by about $1,400,000, which the city plans to cover in part from cash reserves unless alternative measures are taken. "So in other words, in 2026, the way the budget sits right now, we're projecting our general fund expenditures to exceed general fund revenues by $1,400,000," Hoagland said during the presentation.

He said sales tax was roughly 3.3% higher in 2025 than 2024 while some categories, including private utility tax, saw one‑time bumps tied to higher energy prices. Hoagland reported the city collected $575,007.99 in lodging tax and that overall sales‑tax collections were about 6% above the budgeted figure for the year. He described cash positions across funds — general fund operating cash of roughly $2.8 million and a rainy‑day fund of about $5.3 million — and explained a proposed reallocation of property‑tax shares to direct more revenue to the general fund. "That's why after going through and doing some additional analysis... I'd be much more comfortable reallocating some of that property tax back into the general fund," he said.

Council members and staff flagged trade‑offs if the city relies on one‑time reserves repeatedly. Council Member Christine Cleland McGrath noted that repurposing park reserves to shore up core services is a short‑term fix: "That is not something that we can continue to do, year after year. We will run out of those reserve funds." Staff said a first‑quarter 2026 budget amendment will formalize reallocated property‑tax distributions and other technical adjustments.

Council Member Mantini moved to approve Ordinance 5016; after a roll‑call vote the ayes were five and the noes zero, and the ordinance passed. The council directed staff to correct a misspelling of "Anacortes" in the amendment documents before execution. The budget amendment covers adjustments across parks, cemetery, ACFL funds, ER&R equipment carryovers and other technical items and will be followed by revised presentation materials and a more detailed Q1 amendment packet.