Thurston County reviews proposed 2027 internal service rates, directs staff to prepare mid‑year budget

Thurston County commissioners on Wednesday heard a department‑by‑department briefing on proposed 2027 internal service rates and directed staff to develop a mid‑year budget using the rates as presented.

County Manager Linda Hernandez thanked staff for the work and introduced the presenters, saying internal service rates “represent a huge component of what the county does in its interaction with offices and departments.” Central Services Director Kim Burnett told the board the draft plan (excluding fleet) would raise internal service costs an overall 0.5% and increase charges to the general fund by about 1.8%, largely because of added office space for the sheriff’s office and district court and higher atrium lease rates.

Burnett said the county now owns 31 buildings totaling about 858,763 square feet with a maintenance portfolio valued at roughly $211,500,000. She outlined several cost reductions carried into the 2027 rates, including elimination of five positions, contract reductions in landscaping and custodial services, and a roughly $75,000 cut in one landscaping contract for 2026 that carries forward.

On fleet, staff reported a 19.1% decrease in maintenance and operations charges driven primarily by a lower surcharge after a healthy fund balance; fleet reserves were projected to fall 9.5%. Fleet staff said costs also fell because the county extended vehicle lifecycles (for example, from 10 years/100,000 miles to 12 years/120,000 miles) and removed several high‑cost assets (one listed at about $800,000). Robert, the fleet services manager, said the sheriff’s office now has vehicles more quickly because staff have been allowed to buy vehicles in real time to avoid dealer backlogs.

Information Technology Director Sherry Aylg said IT is 100% cost recovery. IT’s proposal reduces the general fund share by 1.4% and shows an estimated 5.4% increase in external hardware costs driven by a 30–40% rise in component prices; the department extended replacement cycles (PCs to a six‑year plan) and removed the Amanda permit system from 2027 billings because it will no longer be supported after October.

Tara, the compensation and benefits manager, described HR charges, noting the benefits fund is billed by FTE and the lead buyout fund (created about 2022) currently pays roughly 25% of retirement cash‑outs. Commissioners discussed whether to expand that fund’s scope or contribution rate to reflect retirement and leave trends.

Brian Bishop, risk and safety manager, said the risk fund uses prior premiums, anticipated premium increases, current claim activity and incurred‑but‑not‑reported claims to set rates. He cautioned the board that the county does not receive final pooled insurance premiums until October, so the risk component of the proposed rates is provisional and could change. Bishop also said the county has established a reserve for anticipated juvenile detention claims.

After questions and follow‑up requests for consolidated totals and allocation details, a commissioner moved to “direct staff to develop a proposed midterm budget with the rates as presented.” The motion was seconded and the chair announced the motion carried; the board asked staff to provide the full totals and follow up materials for the full board.

Next steps: staff will prepare the proposed mid‑year budget and provide detailed totals and allocation tables to the commissioners for use in departmental budget building.