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Finance director: Redmond collected $11.3M more in sales tax than expected; fourth‑quarter 2025 report shows positive results
Summary
Finance Director Kelly Cochran presented draft fourth‑quarter 2025 financials on Mar. 17, noting stronger‑than‑expected sales tax (+$11.3M), largely development‑driven and partly one‑time, and flagged monitoring needs for grants timing and human‑resources medical claims.
At the March 17 meeting, Finance Director Kelly Cochran delivered the City of Redmond’s draft fourth‑quarter 2025 financial report, telling council the city’s fiscal position shows positive results but includes items staff will continue to monitor.
Cochran said sales‑tax collections exceeded expectations by about $11.3 million—an increase tied largely to development activity and newly taxed services under House Bill 5814 (implementation of sales tax on certain services). She cautioned that a portion of the extra revenue is one‑time, development‑driven money and should not be treated as an ongoing baseline. "We have collected $11,300,000 more than we expected," Cochran said, noting much of that comes from construction‑related sales tax and IT services now taxable under state law.
Cochran summarized other fund areas: draft revenues and expenditures are generally aligned with expectations; some intergovernmental receipts and grant billings are delayed and will be recorded as year‑end transactions; utility tax and EMS transport fees are picking up as administrative processes normalize; and capital collections tied to development are stronger than forecasted. She said staffing and benefit savings were accumulating in some departments while human‑resources medical claims were a notable cost risk under review.
Council members asked how House Bill 2015 (a proposed local sales tax measure discussed by the council) and other possible changes could affect revenue projections. Cochran said HB 2015 could generate about $5.5 million annually for the city if adopted, but that staff had not budgeted for that revenue in the current 2025–26 biennium. Council discussion focused on cautious use of one‑time revenue and on where to direct any new ongoing funds.
Cochran said staff will return with more detailed forecasts and department‑level reports as year‑end closings finalize; a quarter‑one report is scheduled for May and a full biennium forecast will be part of the fall budget process.
The presentation was received for discussion; no formal council action was taken at the meeting.
