HomeMy WebLinkAbout2024.11.12 Council Special Meeting Packet
AGENDA
City Council Special Meeting
7:00 PM - Tuesday, November 12, 2024
Pasco City Hall, Council Chambers & Microsoft Teams Webinar
Page
1. MEETING INSTRUCTIONS for REMOTE ACCESS - Individuals, who would
like to provide public comment remotely, may continue to do so by filling out
the online form via the City’s website (www.pasco-wa.gov/publiccomment)
to obtain access information to comment. Requests to comment in meetings
must be received by 4:00 p.m. on the day of this meeting.
To listen to the meeting via phone, call 1-323-676-6197 and use access
code 217 530 649#.
City Council meetings are broadcast live on PSC-TV Channel 191 on
Charter/Spectrum Cable in Pasco and Richland and streamed at
www.pasco-wa.gov/psctvlive and on the City’s Facebook page at
www.facebook.com/cityofPasco.
2. CALL TO ORDER
3. ROLL CALL
(a) Pledge of Allegiance
4. HEARINGS AND COUNCIL ACTION ON ORDINANCES AND
RESOLUTIONS RELATING THERETO
2 - 21 (a) Public Hearing 2025-2026 Biennial Budget (20 minutes)
Conduct Public Hearing
5. ADJOURNMENT
Page 1 of 21
AGENDA REPORT
FOR: City Council November 8, 2024
TO: Adam Lincoln, City Manager City Council Special
Meeting: 11/12/24
FROM: Adam Lincoln, City Manager
City Manager
SUBJECT: Public Hearing 2025-2026 Biennial Budget (20 minutes)
I. REFERENCE(S):
Presentations: 2025 - 2026 Biennial Budget
II. ACTION REQUESTED OF COUNCIL / STAFF RECOMMENDATIONS:
Conduct Public Hearing for 2025 -2026 Biennial Budget
III. FISCAL IMPACT:
2025-2026 Biennial Budgets
IV. HISTORY AND FACTS BRIEF:
Biennial budgeting is the practice of preparing and adopting a budget for a two-
year period. This style of budgeting has been permitting in Washington cities
since 1985. A biennial budget promotes and facilitates long-term financial and
strategic planning - a best practice recommended by Government Finance
Officers (GFOA). General Fund is a primary fund that receives majority of tax
revenue and is used to fund critical City services like Police, Fire, Parks and
Recreation etc.
An overview of General Fund 2025-2026 preliminary budget was provided the
first meeting of October 2024. Following that initial meeting, the General Fund
and its respective departments as well as all other City Funds have been
presented to City Council. Each presentation has provided a comprehensive
review of fund or department financial activity from 2018-2024 estimated year
end, requested 2025-2026 budget figures, an overview of operational
outcomes including accomplishments and goals for the coming biennium and
finally, potential impact of biennial budget decisions.
Page 2 of 21
V. DISCUSSION:
Tonight's meeting offers an overview of the City of Pasco's budget as a whole.
The discussion will cover 2023-2024 budget decisions and projected end of
year fiscal outcomes.
Municipal budgeting always rests heavily on strategic planning and City-wide
collaboration between Council, City Manager's Office and departmental staff.
Planning the 2025-2026 budget relied on these recurring practices. However,
due to financial constraints additional effort was made including resetting
financial expectations and budgetary levels to meet current economic realities.
As part of this effort to streamline expenses, the following goals were targeted:
Minimize reliance on reserves to extend savings availability
Reset budget levels resulting in reductions from 2023-2024 levels
Establish a common understanding and expectation City-wide about
General Fund budget resources
Create a biennial budget that maintains critical services
Support necessary efforts in the 2025-2026 biennium that will serve as a
bridge to economic development in future years
As final inputs to budgetary figures, City staff requests Council direction
regarding the following recommended budget elements:
1. Inclusion of a cost-of-living escalation to wage schedules, increase to
existing budget of $2.9M for the biennial period.
2. Deferral of vehicle replacement savings set aside, biennial budget
reduction of approximately $1.3M.
3. Strategic vacancy replacements that will serve to limit biennial labor
costs by an estimated $5.8M.
Without the inclusion of the above recommended budget elements, the fiscal
impact of 2025-2026 biennial budget is a net General Fund deficit of $16.5M.
With the determination to follow budget recommendations, the net deficit in
General Fund spending reduces to $12.3M. Of this reduction in reserves,
$2.6M Therefore, 2023. received proceeds in of use for accounts bond
operationally the draw on reserves for the biennium is $9.6M.
Reflective of economic conditions, other City funds were budgeted to meet
current revenue levels. This measurement resulted in funds, especially when
considering utilities, creating budgets that severely limited budget for breakage
and as serve will biennium maintenance. The prudent an 2025-2026
opportunity to reset budgetary expectations with the complementary work of
process improvement and careful evaluation of future operational, capital and
funding scenarios.
Page 3 of 21
As a result of this discussion and representative of Council direction, staff will
complete any necessary budget changes and balance the budget for final
presentation. A second public hearing is scheduled for the Council meeting of
November 18th.
Page 4 of 21
November 12, 2024
Pasco City Council
Workshop Meeting
Pa
g
e
5
o
f
2
1
2025 –2026
Biennial Budget
November 12, 2024
Pasco City Council
Pa
g
e
6
o
f
2
1
3
2023-2024 Overview
•Population growth from 2020-2022 of 4%
•Various master plan and operations studies exposed need for
staff additions
•Support for Animal Control Facility Operations
•Basic Law Enforcement Academy
•Fire Station 85 Opening
•Pasco Public Facilities District support
•Downtown Events, Farmers’ Market and Pasco Specialty
Kitchen
•Addition of Broadmoor Area and East UGA
•Significant increase in transportation and utilities funding and
projects
Pa
g
e
7
o
f
2
1
4
2023-2024 Overview
•2023-2024 Biennium included addition of staffing City-wide
•53 FTE in General Fund
•25 for public safety services of fire, police and municipal
court
•9 supporting parks & recreation and facilities
•3 engineering staff to aid in project delivery
•4 community development staff
•12 spread across supporting departments of Finance,
Information Technology, City Managers’ Office and
Human Resources
Pa
g
e
8
o
f
2
1
5
Biennium Projected Revenues
As of 9/30/2024
•Building permits
slightly lagging
budgetary levels
•Charges for
Services related to
development plan
fees
•Miscellaneous
revenues are
higher due to
interest earnings
on available cash
balance
•Other financing
sources reflect
bond proceeds for
TIF projects
Pa
g
e
9
o
f
2
1
6
Biennium Projected Expenses
As of 9/30/2024
•Pace of transportation
projects in Tax Increment
Area may require transfer
out amendment. Bond
revenue supports.
•For other expense types,
current expectation is
within budgetary limits.
•Risk of overage
•Overtime
•Vacation Cash
Out
•Repair for
unexpected
breakage
Pa
g
e
1
0
o
f
2
1
7
2023-2024 Budgetary Impacts
•Higher Interest Rates: Slowing commercial and
residential development.
•Inflation Impact:
•Reduced buying power for residents.
•Significant cost increases for City opertaions.
Pa
g
e
1
1
o
f
2
1
8
2023-2024 Budgetary Projection
•2023-2024 Budget Plan:
•Projected expense-revenue gap: $15.3M
•2024 Year-End Projection (as of 9/30/2024):
•Net operating revue: Break-even to $3M
deficit (current trend)
•Future Outlook:
•Relief anticipated from delayed debt service
initiation for 2025 TIF area improvements.
Pa
g
e
1
2
o
f
2
1
Municipal Budgeting
9
Council Goals and
Workplan
Strategic planning
•Traffic Improvement Plan
•Capital Improvement
Plan
Preliminary Finance
Projections
•Revenue estimates
•Internal services budget
•Labor expense projections
Budget Kick-Off and
Training Meeting
Department budget
planning and update
•New requests for
personnel, programs and
purchases
Review requests for
budget sufficiency
Presentation of
Preliminary Budget
Pa
g
e
1
3
o
f
2
1
10
2025-2026 Biennial Budgeting Process
•Initial Baseline Budget Challenge: Average General Fund reserve drawdown of
$12.2M per year (2025-2026 biennium).
•Collaborative Revision Effort: Led by City Managers’ Office, department directors,
and finance staff.
Goals:
1.Preserve Reserves: Reduce reliance on General Fund reserves.
2.Align Expenses with Revenue: Reset budget to match operational revenues.
3.Unified Vision: Foster consistent, City-wide understanding of budget capacity.
4.Sustain Critical Services: Bridge funding gaps while maintaining essential
services.
5.Future Growth: Economic development (Broadmoor Area, Urban Growth
Boundary expansion) to generate additional resources.
Pa
g
e
1
4
o
f
2
1
11
2025-2026 Budgetary Revenues and Expenses
Prior to Recommended Items
Pa
g
e
1
5
o
f
2
1
12
2025-2026 General Fund
Seeking Council
Direction:
Wage schedule
increase
Deferral of vehicle and
equipment savings
accumulation
Strategic and deferred
replacement for labor
position vacancies
Net budgeted ending
fund balance
improvement with
options:
$2.0M in 2025
$2.2M in 2026
Pa
g
e
1
6
o
f
2
1
13
•Process improvement
•Evaluate opportunity to centralize
processing for common, across
departments activity
•Investigate use of existing or low-
cost software solutions to
minimize demand on staff while
meeting or exceeding current
service levels
•LEAN
2025-2026 Initiatives
•Establish schedule for fee and
rate evaluation across City Funds
•Evaluation of fund operations
and financing focusing on funds
requiring,
•Subsidies
•Sufficiency of reserves
•Capital support
•Quarterly financial reporting
Budget and operational planning in this biennium has been reset to better match revenue
level expenditures. 2025-2026 Biennium expected to serve as bridge to future opportunity with
addition of Broadmoor Area economic development.
Pa
g
e
1
7
o
f
2
1
14
2025-2026 Budgetary Impacts
Budgetary Reductions
•Training and travel where not
required for certifications
•Combination/limitations for
community events
•Deferral of maintenance to meet a
break-fix schedule
•Pause in implementation of new
programs or positions
•Judicious review of open positions
•Reassign roles to limit labor costs
•Will result in slower response
time to non-emergency requests
•With reduced workforce non-
essential timelines will extend
What will not be impacted
•Essential, certification necessary
training
•Response to emergency, critical
public safety
•Provision of necessary tools and
protective gear
•Commitment to quality customer
service
•Dedication to financial
stewardship
•Strategic approach to
fundraising
Pa
g
e
1
8
o
f
2
1
15
Next Steps
•Required Council direction
o Wage schedule increase (Cost of Living Adjustment)
o Deferral of vehicle and equipment savings accumulation
o Strategic and deferred replacement for position vacancies
•Second public hearing, November 18th, 2024
•Based on Council direction, finalization of budgetary figures
and balance of funds can occur
•Request for approval, November 25th, 2025
Pa
g
e
1
9
o
f
2
1
16
Future Considerations
•Conservative Budgeting: Awaiting rate and fee discussions.
•Future Planning:
•Operational and capital needs require funding scenario
evaluations.
•Timing of projects and Council input will guide decisions.
•Flexibility: Budget amendments may be necessary in case
of unexpected issues.
Pa
g
e
2
0
o
f
2
1
Questions? Pa
g
e
2
1
o
f
2
1