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University Place posts stronger-than-expected Q1 revenues; council weighs using $17M cash to cut debt
Summary
City finance staff reported Q1 general government revenues were 11.03% above budget and operating expenditures 16.18% below estimates. Council questioned whether to apply roughly $17 million in available cash to pay down bonds; staff said bond counsel is modeling payoff options and recommended maintaining conservative cash balances amid economic uncertainty.
University Place finance staff presented a first-quarter financial report on June 15 showing revenues ahead of expectations and operating expenditures below budget, while council members pressed for analysis of a possible debt-payoff using available cash.
Finance Director Leslie Blaisdell and Deputy Finance Director Grace Oh reported that the city's general government revenues were 11.03% above 2026 budget estimates, with first-quarter sales tax 12.6% above estimate and investment interest totaling $490,740. Blaisdell said utility tax revenues exceeded budget by 21.59% while real estate excise tax collections for the quarter totaled $291,101, 6.85% below estimate.
During council questions, members raised whether the city should use an approximately $17 million cash balance to pay down outstanding bonds. Deputy Finance Director Grace Oh said she had reached out to bond counsel to quantify tradeoffs for paying off all or part of the debt and emphasized a cautious approach. "Right now, with the uncertainty of what's happening in the economy, my recommendation is to, you know, always make sure we have enough cash balances to weather a storm should it come," she told the council.
Council member Wood asked staff to model savings from different payoff amounts; Grace Oh said the city's annual debt payment is about $3.5 million and that she expected to return with detailed analyses after consulting bond counsel.
Other details in the report: development services fees reflected a 67.72% shortfall for the quarter tied to project timing; public safety revenues were 2.5% below budget with mixed performance across sources; and operating expenditures were 16.18% below budget estimates, the finance directors said.
The presentation concluded with council thank-yous to city finance staff; staff will return with bond payoff scenarios and more detailed figures for council consideration.
