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Issaquah finance director reports stronger‑than‑forecast 2025 revenues; council asks for line‑item clarity
Summary
Finance Director Kristen Garcia told the Issaquah City Council that preliminary, unaudited 2025 results show higher revenues than budgeted — including $9.6 million in one‑time asset‑sale proceeds — and an $8.1 million ending unrestricted general fund balance; council members pressed for clearer line‑item and operating vs. capital detail.
At its May 4 meeting the Issaquah City Council heard a preliminary, unaudited year‑end financial update for 2025 from Finance Director Kristen Garcia. Garcia told the council that total city revenues across all funds were about $181 million and that the general fund’s ending unrestricted balance was $8.1 million, roughly 12% of unrestricted expenditures.
Garcia said part of the variance between budget and actuals resulted from a one‑time $9.6 million receipt tied to the sale of northwest City Hall and the food bank; those proceeds were excluded from routine fund‑balance calculations. “The total ending unrestricted fund balance at the end of 2025 was 8.1 million,” Garcia said, and she emphasized that the sale proceeds were a nonrecurring source of income.
The presentation walked council through the city’s “big four” general fund revenue sources — property tax, sales tax, business & occupation tax and utility tax — and highlighted timing issues that affect capital‑project reimbursement. Garcia noted that sales tax and property tax came in largely aligned with budget, B&O receipts came in higher than budget, and utility tax increases had been overestimated in the forecast.
Council President Marts and other members pressed for more granular information. Marts said the slides showing a roughly $12.4 million variance (of which $9.6 million was the asset sale) left unanswered why the ending fund balance rose only modestly. Garcia conceded the charts mixed original and modified budgets and acknowledged she would provide clearer line‑item detail; she also said staff will separate operating and capital figures for future enterprise‑fund reporting.
Garcia repeatedly reminded the council that the numbers presented were preliminary and subject to audit, and that some differences reflected mid‑biennium appropriations or the timing of reimbursements. She said the city will bring a Q1 2026 update and a more detailed breakdown to the council’s upcoming budget sessions.
What happens next: Council members asked staff for a line‑item, operating‑versus‑capital breakdown and for improved forecasting methods. The council scheduled a longer budget discussion at its May 9 retreat and a follow‑up update in June.
Sources: Finance Director Kristen Garcia’s presentation and council questions at the May 4, 2026 meeting of the Issaquah City Council.
