Lake Stevens finance staff walk council through municipal budgeting as city prepares 2026 schedule

Finance Director Barb Stevens told the Lake Stevens City Council on Feb. 3 that the city will close its 2025 financials, update forecasts and begin work on the 2026 budget after a presentation meant to bring councilmembers ‘‘on the same page’’ about municipal finance.

The briefing, introduced by Council President Jorstad, explained the finance department’s core duties—cash and treasury management, procurement compliance, payroll, accounts payable/receivable, grant accounting and asset management—and outlined a calendar that will include updated beginning balances, a proposed budget amendment and early council workshops.

Stevens said the city follows state legal requirements for budgets and reporting and that Lake Stevens is a code city operating under RCW 35/35A. ‘‘Budgets are legal documents’’ that forecast resources and authorize spending, she said, adding that many city funds are restricted for specific purposes and cannot be repurposed.

Finance Manager Matthew Heist described recent efforts to improve reporting and controls, including standardized reports in Springbrook and a move to ‘‘nearly a 100% electronic’’ accounts-payable process. Heist also highlighted the scale of operations: AP processed roughly $39 million in vendor payments last year and payroll expense was reported at about $20.5 million.

Stevens and Heist framed staffing and systems as the department’s principal challenges. Stevens said city staffing has grown about 54% since 2020, increasing payroll complexity while the payroll team remains small; Mary Wells is the department’s lone payroll accountant. The pair told council that the city’s current software limits on-the-fly scenario modeling and that staff are evaluating integrated HR/payroll/finance solutions and interim integrations.

The presentation also noted an upcoming federal single-audit of the city’s federal awards triggered by the Main Street grant, which Jessica Skagland administered. Stevens said the city has historically had clean financial and accountability audits from the Washington State Auditor’s Office and is preparing the schedules and records the auditors will review.

Councilmembers asked about the number of active grants; Stevens said the city administers roughly four to five federal grants (some small) and about ten state grants, and that staff will publish the required schedule of federal expenditures in advance of the audit.

Stevens closed by proposing more frequent, shorter budget check-ins—potentially on the council’s occasional fifth-Tuesday meeting date—and a March session to review final 2025 balances and early 2026 forecasts. ‘‘We need to get everybody on board early so it doesn’t become a cantankerous process later,’’ she said.

The council did not take formal budget action at the session; staff described closing 2025 and rolling forward beginning balances as the immediate next steps.