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Home My WebLink About2026.10.22 Council Special Meeting Packet AGENDA City Council Special Meeting 4:00 PM - Thursday, October 22, 2026 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 1:00 p.m. on the day of this meeting. To listen to the meeting via phone, call 1-332-249-0718 and use access code 154 305 638#. 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. Audio equipment available for the hearing impaired; contact the Clerk for assistance. 2. CALL TO ORDER 3. ROLL CALL (a) Pledge of Allegiance 4. BUDGET DISCUSSION 2 - 30 (a) 2027-2028 General Fund Budget Scenarios No Action Requested 5. PUBLIC COMMENTS - For 25 people x 2 minutes per person or up to an hour total, whichever is greater. 6. ADJOURNMENT Page 1 of 30 AGENDA REPORT FOR: City Council October 21, 2026 TO: Harold Stewart, City Manager City Council Special Meeting: 10/22/26 FROM: Harold Stewart, City Manager City Manager SUBJECT: 2027-2028 General Fund Budget Scenarios I. ATTACHMENT(S): PowerPoint Presentation II. ACTION REQUESTED OF COUNCIL / STAFF RECOMMENDATIONS: No Action Requested III. FISCAL IMPACT: Not Applicable IV. HISTORY AND FACTS BRIEF: Staff presented on October 13th an overall budget landscape with a preliminary look at the 2027-2028 Biennial Budget for the General Fund. City Manager Stewart and Staff presented the impacts of that budget scenario and received feedback from City Council and Community Members. Then on October 19, 2026 staff again presented budget information on the Utility and other funds for the 2027-2028 Biennial Budget. V. DISCUSSION: Staff will be presenting additional scenarios as requested by Council and are seeking feedback on future meetings and direction for additional scenarios in preparation for adoption of the budget in early December. Page 2 of 30 Budget Presentation October 22, 2026 Pasco City Council Pa g e 3 o f 3 0 Building the Budget Review of Projections What We've Done So Far Options for Increasing Revenue Scenario #5 Scenario #6 01 02 03 04 05 Pa g e 4 o f 3 0 2027-2028 Projections for General & Reserves: Revenues & Expenses 3 Pa g e 5 o f 3 0 The General Fund by The Numbers – CM Proposed 4 Pa g e 6 o f 3 0 The General Fund by The Numbers – CM Proposed 5 CMO 2.7% PW Admin 0.2% Pa g e 7 o f 3 0 The General Fund Reserves (Includes $12M from Economic Development Fund) 6 0 5,000,000 10,000,000 15,000,000 20,000,000 25,000,000 30,000,000 35,000,000 40,000,000 45,000,000 2019 2020 2021 2022 2023 2024 2025 2026 Proj 2027 Prop 2028 Prop Uncommitted Fund Balance Economic Development Fund Balance General Fund Unrestricted Pa g e 8 o f 3 0 7 Pa g e 9 o f 3 0 What We Have Done – General Fund 8 General Fund Reserve: •Reduced reliance on reserves from $15M for 2023–2024, to $13M in 2023–2024; would have been $17M if cuts had not been made. Cost Savings: •Council froze nearly 27 General Fund positions to mitigate rate increases:$3.3M •Reduced costs throughout departments, like vehicle and equipment costs, elimination of Assistant City Manager position, and analysis of positions before they are filled: $500K •Library Annexation: $3M •Transportation Benefit District: $2.3M (Does not directly impact General fund but reduces future strain on it) •Increased utility tax from 8.5% to 10%:$1M Cost Increases: •Medical premium costs: $3.3M •Code Enforcement & traffic calming:$170K •Fuel costs •Supplies Pa g e 1 0 o f 3 0 What We Have Done – Utility Rates 9 Utility Rate Increases Annual increase 2026 2027 2028 2029 Water 20.75%20.75%20.75%9.50% Sewer 8.00%8.00%8.00%8.00% Irrigation 17.75%17.75%3.00%3.00% Pa g e 1 1 o f 3 0 What We Have Done – Development Fees 10 •Transportation Impact Fee – Increased fees for the first time in nearly 17 years. Single family home went from $709 to: •North Pasco: $2,215.84 per PM peak hour trip •West Pasco: $1,396 •Central Pasco: $2,695 •South Pasco: $3,862 •East Pasco: $812 •Utility Connection Fees: •Water - $866 to $6,148 •Sewer - $1,828 to $4,583 •Irrigation - $0 to $1,000 •Development Review Fees: •$60/hour to $105/hour •Directed staff to conduct comprehensive fee study; study in progress Pa g e 1 2 o f 3 0 •Increase CED Development Fees up to 100% Cost Recovery •HB 2015: Public Safety Sales Tax •Council-authorized 0.1% sales and use tax •Revenue restricted to police purposes •Estimated Pasco revenue: estimated $2.3 million annually •Only alternative that Council approve unilaterally •Property Tax Levy Lid Lift •Pasco's 2026 general levy rate:$1.14 per $1,000 AV •Voters can authorize an increase above the City's normal annual levy -growth limit •Amount/rate would be established in the ballot measure but could be as high as $3.25 •Statutory levy limits and other property -tax limitations still apply •Fire Protection District / RFA •Could shift fire-service funding from the City's General Fund to a separate fire -service taxing entity •Could reduce City General Fund responsibility for fire services •Requires a separate governance, funding and voter -approval process •City's available property-tax levy capacity would also be affected •Metropolitan Park District •Separate taxing district dedicated to parks and recreation •Could shift some parks and recreation costs outside the General Fund •Requires voter approval •State law provides levy authority of up to $0.75 per $1,000 AV through two regular levies ($0.50 + $0.25), subject to applicable property -tax limits. Potential Revenue Options 11 Pa g e 1 3 o f 3 0 Scenario #5: Minimal Impacts to Public Safety & No New Taxes 12 Pa g e 1 4 o f 3 0 13 Pa g e 1 5 o f 3 0 Scenario #5- Minimal Public Safety Impacts 14 2027 CM Presented 2027 Change 2027 New 2028 CM Presented 2028 Change 2028 New Revenue $88.6M $0 $88.6M $86.4M $0 $86.4M Expense $88.3M $2.8M $91.1 $89.1M $2.9M $92.0M Reserves - Deficit $255k ($2.7M)($2.5M)($2.7M)($2.9M)($5.6M) Pa g e 1 6 o f 3 0 •Original CM Proposed Budget Plan Reduces staffing across all funds by 54.5 FTE. •This excludes addition of 8 FTEs for Sewer Utility that is regulatorily required and paid by ratepayers. •Reduces FTEs: •Police – 22 (2 Mgmt.) •Fire – 15 (1 Mgmt.) •CED – 3 •City Manager’s Office – 2 •Finance – 2 •HR – 0 •IT – 3 (1 Mgmt.) •Municipal Court- 0 •Parks & Recreation – 2.5 •PW – 5 throughout various funds Staffing Impact- CMO Proposed vs Scenario #5 15 •Scenario #5 Reduces staffing across all funds by 37.25 FTE. •This excludes addition of 8 FTEs for Sewer Utility that is regulatorily required and paid by ratepayers. •Reduces FTEs: •Police – Freeze 1 Mgmt. (-21) •Fire – 0 (-15) •CED – 4 (+1) •City Manager’s Office – 3 (1 Mgmt.) (+1) •Finance – 3 (+1) •HR – .75 Mgmt. (+.75) •IT – 3 (1 Mgmt.) (0) •Municipal Court – 3 (+3) •Parks & Recreation – 14.5 (2 Mgmt.) (+12) •PW – 5 throughout various funds Pa g e 1 7 o f 3 0 Deficit: $2.5M Total FTE Reductions: 37.25 •Additional reductions across non -public-safety departments, while minimally reducing Police and Fire operating resources. How Will Public Safety be Impacted Police •K-9 replacement •Eliminates Flock program •Closes 2 mini stations •Keep 1 mgmt. position (Deputy Chief) vacant Fire •Closes Station 82 but preserves positions •Reduces operational overtime by $500K •Reduces fire investigator program •Defers strategic plan development •Defers accreditation plan Other Departments •Eliminates Recreation Division •Eliminates significant programs in other departments that will impact support to critical programs like Public Safety and Utilities •Cuts still require ~ $2.5M of usage of reserves in 2027 with widening gap to $5.6M in 2028 and so forth If the budget uses reserves in 2027 or balances to $0, inflation will create a deficit in 2028 and on. Long term sustainability discussion is needed. What Scenario #5 Means 16 Pa g e 1 8 o f 3 0 Parks, Recreation & Community Services - Additional $2.2M in Reductions Total Staffing Impact: 14.5 FTE (2 Mgmt.) Changes: •Eliminate Recreation Division, including youth/adult athletics, tournaments, camps, senior and arts programming. •Eliminate park and facility rentals, special events, and operations at 15 neighborhood parks. •Close Memorial Aquatic Park. •Close softball complex & several soccer complexes (Burden, Rd. 48 & Rd. 36). •Eliminate seasonal park staffing, reducing maintenance, restroom access, and irrigation response. •Transfer remaining Parks and Public Facilities responsibilities to other departments. Impacts: •Approximately 6,000 annual recreation participants lose City-operated programs, including affordable youth, adult, and senior opportunities. •Reduced economic impact from removal of sports tourism. •Closing 15 neighborhood parks and eliminating rentals reduces access to gathering spaces, athletics, and neighborhood recreation. •Reduced maintenance staff means closed restrooms, less frequent trash collection, delayed repairs, and declining park conditions. •Additional discussions needed for what we will do with closed parks. •Plan for preservation or sale of facilities. •Will impact quality of life and future public safety of the community. What Scenario #5 Means 17 Pa g e 1 9 o f 3 0 Human Resources – Additional $268k in Reductions Staffing Impact: Additional Reduction (.75 FTE) Changes: •Consolidate mgmt. position; reduce labor counsel funding •Reduce recruitment, leadership development, and performance management resources •Eliminate compensation studies and market - analysis tools Impacts: •Delayed Budget Savings: Reduced capacity to implement Citywide layoffs and restructuring while maintaining daily operations. •Increased Legal Exposure: Greater risk of costly grievances, arbitration, employment lawsuits, back pay, setlements and attorney fees. •Reduced Labor Cost Oversight: Less ability to evaluate bargaining proposals, monitor market competitiveness, identify pay inequities, and manage long -term personnel costs. •Reduced Citywide Support: Delays in hiring, investigations, employee discipline, and performance accountability, including support for Police and Fire. What Scenario #5 Means 18 Pa g e 2 0 o f 3 0 Finance – Additional $110k in Reductions Staffing Impact: Additional (1 FTE) Changes: •Additional position removed. Impacts: •Reduced staffing increases workloads and may delay financial reporting, month-end closing, purchasing, records management, and customer service. •Additional reductions could increase compliance risks, staff turnover, and reliance on outside assistance. Municipal Court - Additional $441k in Reductions Staffing Impact:(3 FTE) Changes: •Probation program removed. •Graffiti Abatement program removed. Impacts: •Reduced probation and graffiti abatement may increase repeat offenses and shift workload to Police. •Reduced IT support, Fire overtime, and operational capacity may affect emergency response and service reliability. What Scenario #5 Means 19 Pa g e 2 1 o f 3 0 City Manager's Office - Additional $308k in Reductions Staffing Impact: Additional (1 FTE) Changes: •Additional position removed (management). •Additional training and supplies eliminated. Impacts: •Slower response to Council and citizen inquiries. •Responses will have to be prioritized, and some may not receive responses. •Reactive leadership. •Slower project delivery. •Reduced oversight and higher risk exposure. IT Reminder: •60% of the budget is for software and services City purchases for operations. •$1.5M in labor for 10.4 FTEs; evaluation of support for cybersecurity, network stability, public safety support for their technology from outside vendor is needed before any action is taken. CED -Additional $112k in Reductions Staffing Impact: Additional (1 FTE) Changes: •Limited to prioritizing life-safety issues first, followed by complaint-based items in accordance with City-directed priorities. •Longer permit processing, planning and development review timelines. •Slower customer service and response times. •Delays across planning, permitting and other departmental functions. Impacts: •Increase development fees to 80% cost recovery. What Scenario #5 Means 20 Pa g e 2 2 o f 3 0 Long Term & Economic Development Considerations 21 Community Investment & Quality of Life •Loss of recreation programs, neighborhood parks, and community events reduces opportunities for youth development, physical activity, and social connection. •Fewer tournaments, events, and facility rentals may reduce spending at local restaurants, hotels, and businesses. •Reduced public amenities may affect Pasco's ability to attract and retain residents and employers. Development & Future Revenue •Reduced CED staffing and increased development fees may affect permitting timelines, investment decisions, and development competitiveness. •Slower development could delay growth in property and sales tax revenues. •Closing neighborhood parks may raise questions about future park impact fees and development obligations. Infrastructure & Long-Term Costs •Reduced road, park, and facility maintenance may accelerate deterioration and increase future repair costs. •Eliminating grant application efforts could reduce opportunities for outside infrastructure funding. •Closed facilities and parks may still require security, maintenance, insurance, and eventual rehabilitation. Organizational & Financial Sustainability •Reduced HR, Finance, and IT capacity increases workload, compliance exposure, and reliance on remaining employees. •Loss of experienced employees and institutional knowledge may increase future recruitment and service restoration costs. •Contracting or transferring responsibilities may reduce staffing costs but does not eliminate the underlying work. How do immediate budget savings affect Pasco's long-term costs, economic growth, and ability to deliver services? Pa g e 2 3 o f 3 0 Scenario #6: Reduced Impacts to Public Safety + New Taxes 22 Pa g e 2 4 o f 3 0 Scenario #6- Reduced Public Safety Impacts + New Taxes 23 2027 CM Presented 2027 Change 2027 New 2028 CM Presented 2028 Change 2028 New Revenue $88.6M $2.3M $90.9M $86.4M $5.3M $91.7M Expense $88.3M $3.6M $91.9 $89.1M $3.6M $92.7M Reserves - Deficit $255k ($1.3M)($1.0M)($2.7M)$1.7M ($1.0M) Pa g e 2 5 o f 3 0 24 Pa g e 2 6 o f 3 0 •Original Proposed Budget Plan Reduces staffing across all funds by 54.5 FTE. •This excludes addition of 8 FTEs for Sewer Utility that is regulatorily required and paid by ratepayers. •Reduces FTEs: •Police – 22 (2 Mgmt.) •Fire – 15 (1 Mgmt.) •CED – 3 •City Manager’s Office – 2 •Finance – 2 •HR -0 •IT – 3 (1 Mgmt.) •Municipal Court- 0 •Parks & Recreation – 2.5 •PW – 5 throughout various funds Staffing Impact- CMO Proposed vs Scenario #6 25 •Scenario #6 Reduces staffing across all funds by 35.5 FTE. •This excludes addition of 8 FTEs for Sewer Utility that is regulatorily required and paid by ratepayers. •Reduces FTEs: •Police – 13 (1 Mgmt.) (-9) •Fire – 5 (1 Mgmt.) (-10) •CED – 3 (0) •City Manager’s Office – 2 (0) •Finance – 2 (0) •HR - 0 (0) •IT – 3 (1 Mgmt.) (0) •Municipal Court - 0 (0) •Parks & Recreation – 2.5 (0) •PW – 5 throughout various funds (0) Pa g e 2 7 o f 3 0 Deficit:$1.0M Total FTE Reductions: 35.5 •Scenario Includes these taxes and fees: •1% Police Sales Tax: •Estimated $2.3M in additional revenue •$0.25 Levy Lid Lift: •Estimated $3M in additional revenue, beginning in 2027 if approved by voters Continues City Manager’s Proposed Budget BUT adds back Public Safety FTEs and Memorial Pool with the additional revenue What Will Change: Police •13 positions eliminated instead of 22 •Substantially reduces patrol capacity and proactivity Fire •5 positions eliminated instead of 15 (includes not hiring 2 vacant positions) •Close Station 82 but preserve positions that can be saved via long term labor costs; find additional $700K outside of identified savings to see if positions can be preserved Parks and Recreation •Keep Memorial Pool open. Other Departments •Continues the scenario that CM proposed, including the FTE cuts shown in previous slide What Scenario #6 Means 26 Pa g e 2 8 o f 3 0 Service Impact & Future Tradeoffs 28 Immediate savings may shift costs to other departments, increase operational risks, and make services more difficult or expensive to restore. If the budget uses reserves in 2027 or balances to $0, inflation will create a deficit in 2028 and on. Long term sustainability discussion is needed. Pa g e 2 9 o f 3 0 Questions & Discussion Pa g e 3 0 o f 3 0