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Anacortes council hears first reading of budget and CFP amendments as REIT outlook tightens
Summary
At a March 2 council meeting, Finance Director Steve Hogland gave first reading of a 2026 budget amendment and Capital Facilities Plan changes tied to real estate excise tax (REIT) projections; council discussed funding trade-offs and a public hearing set for two weeks.
Anacortes Finance Director Steve Hogland presented a first reading of Ordinance 5023, a budget amendment, and a corresponding Capital Facilities Plan amendment on March 2, warning that long-range real estate excise tax (REIT) projections could constrain planned projects.
Hogland told the council that preliminary REIT estimates for 2026 were based on early-year months and historical metrics and resulted in a $1.4 million revenue estimate. “We had 3.3 million left in REIT cash” carried from 2025, Hogland said, describing how that beginning balance plus the projection feeds the capital plan.
The proposed CFP additions include the Q Avenue pedestrian crossing (project total ~$267,173), pedestrian crossing improvements at Tommy Thompson Trail/23rd & D (combined ~$162,642), and a Fire Station 1 remodel (~$312,000). Some projects rely on grants or REIT/impact-fee matches; staff explained that three projects have already been bid and require inclusion in the 2026 CFP so work can proceed this year.
Council members pressed staff on the assumptions behind the REIT outlook and whether projects should be trimmed before final adoption. Council Member Young said he appreciated the detailed walkthrough: “I really appreciate how you go into the details about this,” and Miss Molton noted a recent grant award reduced REIT demands on the 32nd/Stovvik crossing.
Hogland described the public-review process: the city must provide a two-week comment period and hold a public hearing before final action. He recommended bringing the amendments forward for public comment now and said council can revise the CFP during the public hearing if desired.
What happens next: The budget amendment and CFP amendment had a first reading on March 2; the public comment period and public hearing are scheduled in two weeks, when council will consider final adoption or adjustments based on public input and any funding changes.
Budget and process context: Hogland emphasized that multi-year CFP projections can show shortfalls and that staff will return with recommended prioritization if revenues fall short. The council asked staff to model options and indicated interest in a committee or work session review ahead of final decisions.
