Kennewick reviews $550 million biennial budget, flags street‑maintenance shortfall and reserve strategy

Finance Director Jessica Platt presented the City of Kennewick’s 2025 financial year‑in‑review on May 26, telling the City Council the biennial budget for 2025–26 stood at approximately $550,000,000 as of Dec. 31, 2025, with about 55% allocated to operating costs and 28% to capital projects.

Platt said the budget snapshot included an ending reserve position of roughly $95,000,000 across funds and that the general and street fund biennium totaled $150,500,000. “Our budget’s $550,000,000,” Platt said, noting the city has 436.5 approved full‑time equivalent positions and that about half of FTEs are in police and fire.

Council members pressed staff on the durability of revenue gains that lifted 2025 collections. Platt said revenues rose about 7.5% versus 2024 (roughly $4.86 million), with tax revenue up 7.3% (about $3.39 million). She cautioned that much of the gains were driven by one‑time construction‑related sales tax and permit valuation spikes tied to large projects. “With new construction sales tax revenue, that’s really a one‑time revenue source for the city,” Platt said.

Several councilors asked about the mechanics and presentation of interfund transfers, which Platt said are recorded as revenue to the receiving fund under governmental accounting rules. A council member summarized the point as a redistributive accounting effect, saying it can make the headline budget seem larger than the net new resources available.

Platt highlighted policy choices the council approved during the 2025–26 budget adoption that helped bridge a $5 million shortfall, including creating a transportation benefit district and reallocating portions of utility and optional sales tax revenues from the CIP to the general fund to support public safety and information‑technology needs.

The council focused sustained attention on street maintenance funding. Platt warned the fuel‑tax base that supports street maintenance is declining and said the issue is “not sustainable” if left unaddressed. Council members asked staff to return with options during the 2027–28 budget process to stabilize street maintenance financing.

On expenditures, Platt said personnel costs accounted for about 27% of the budget and that other services and charges increased sharply in 2025 largely because of major contract escalations for services such as jail services and emergency dispatch. She pointed to a new Axon contract for public safety that cost “just over $900,000,” funded in part by reallocating optional CIP sales tax to the general fund.

Platt described the city’s reserve posture as unusually strong—about 30% of 2025 expenditures—largely because the city received pandemic and ARPA funds. She warned those one‑time federal dollars have been mostly programmed and urged caution against using reserves for recurring operating costs. The council asked for clear policy recommendations on acceptable reserve drawdown limits and scenarios for using one‑time funds to advance strategic capital projects.

Next steps: Platt reviewed the timeline for developing the 2027–28 biennial budget, with department submissions due June 30 and a preliminary budget anticipated for public release in October; council budget hearings and the property tax levy setting are scheduled for November, with final adoption required by Dec. 30.