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HomeMy WebLinkAbout11-10-2025 Agenda Packet City Council Study Session Finance & Internal Services SFA November 10, 2025 - 5:30 PM City Hall Council Chambers AGENDA CALL TO ORDER PUBLIC PARTICIPATION A. The Auburn City Council Study Session Meeting scheduled for Monday, November 10, 2025, at 5:30 p.m. will be held in person and virtually. Virtual Participation Link: To view the meeting virtually please click the below link, or call into the meeting at the phone number listed below. The link to the Virtual Meeting is: https://www.youtube.com/user/watchauburn/live/?nomobile=1 To listen to the meeting by phone or Zoom, please call the below number or click the link: Telephone: 253 215 8782 Toll Free: 877 853 5257 Zoom: https://us06web.zoom.us/j/87221290963 ROLL CALL AGENDA MODIFICATIONS ANNOUNCEMENTS, REPORTS, AND PRESENTATIONS FINANCE AND INTERNAL SERVICES DISCUSSION ITEMS A. Ordinance No. 7004 (Thomas) (60 Minutes) A presentation to discuss Revenue Requirements, Cost of Service Analysis, and Rate Design for the Water, Sanitary Sewer and Storm Drainage Utilities B. Ordinance No. 7008 (Thomas) (10 Minutes) An Ordinance amending Sections 3.60.010 and 3.60.020 of the Auburn Municipal Code to authorize an additional one tenth of one percent Sales and Use Tax for Criminal Justice purposes in accordance with Section 201, Chapter 350, Laws of 2025, providing for severability, and establishing an effective date C. Ordinance No. 7000 (Thomas) (30 Minutes) An Ordinance amending the City's 2025-2026 Biennial Budget D. Ordinance No. 7003 (Thomas) (10 Minutes) An Ordinance establishing the levy for regular Property Taxes by the City of Auburn for collection in 2026 for general City operational purposes in the amount of $25,843,584 Page 1 of 97 ADJOURNMENT Agendas and minutes are available to the public at the City Clerk's Office and on the City website (http://www.auburnwa.gov). Page 2 of 97 AGENDA BILL APPROVAL FORM Agenda Subject: Meeting Date: Ordinance No. 7004 (Thomas) (60 Minutes) A presentation to discuss Revenue Requirements, Cost of Service Analysis, and Rate Design for the Water, Sanitary Sewer and Storm Drainage Utilities November 10, 2025 Department: Attachments: Budget Impact: Finance Ordinance No. 7004, 7004 Exhibit A--Table for 13-06-360, 7004 Exhibit B--Table for 13-20- 440, 7004 Exhibit C--Table for 13-48-100, Auburn SDC and Wholesale Power Presentation 2 Administrative Recommendation: For discussion only. Background for Motion: Background Summary: The City of Auburn provides water, sewer, and stormwater services to its utility customers. In 2025, the City contracted with FCS Group to perform a Water, Sanitary Sewer, and Storm Drainage Utility Rate Study to review the adequacy of existing rates and to propose new rates as appropriate. The FCS study elements completed to date includes: 1. A review of "revenue requirements" for each utility, which encompass the costs that the City needs to recover on an ongoing basis from utility ratepayers. 2. A cost of service analysis that determines the relative burden each customer class places on the utility. A comparison of existing revenues with the cost of service results then indicates whether each class is paying its fair share of costs for each utility system. 3. A review of system development charges, which are one-time charges imposed on new development or expended connection to the system. 4. A review of wholesale rates. This discussion will review the work performed by FCS Group and summarize their findings. Page 3 of 97 Councilmember: Kate Baldwin Staff: Jamie Thomas Page 4 of 97 -------------------------------- Ordinance No. 7004 November 6, 2025 Page 1 of 2 ORDINANCE NO. 7004 AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF AUBURN, WASHINGTON, AMENDING SECTIONS 13.06.360, 13.20.440, AND 13.48.100 OF THE AUBURN CITY CODE (ACC), RELATING TO CITY UTILITY RATES WHEREAS, pursuant to its powers in RCW 35.92, the City has established water, sewer, and storm drainage utilities to serve its residents; WHEREAS, consistent with its responsibilities to operate these utilities in a cost- effective manner and in a manner that reflects the City’s actual operating costs, the City periodically reviews its utility rate structure to ensure that its rates are set appropriately; WHEREAS, in 2025, the City consulted with FCS Group to study the City’s current utility rates against the City’s cost of utility service delivery and revenue requirements; WHEREAS, in light of the above recitals, and following the FCS Group utility rate review conducted at City staff request, City staff recommends that City utility rates should be adjusted as reflected in this Ordinance. NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF AUBURN, WASHINGTON, DO ORDAIN as follows: Section 1. Amendment to City Code. Section 13.06.360 of the Auburn City Code is hereby amended to read as set forth in Exhibit A to this Ordinance. Section 2. Amendment to City Code. Section 13.20.440 of the Auburn City Code is hereby amended to read as set forth in Exhibit B to this Ordinance. Section 3. Amendment to City Code. Section 13.48.100 of the Auburn City Code is hereby amended to read as set forth in Exhibit C to this Ordinance. Page 5 of 97 -------------------------------- Ordinance No. 7004 November 6, 2025 Page 2 of 2 Section 4. Implementation. The Mayor is authorized to implement those administrative procedures necessary to carry out the directives of this legislation. Section 5. Severability. The provisions of this Ordinance are declared to be separate and severable. The invalidity of any clause, sentence, paragraph, subdivision, section, or portion of this Ordinance, or the invalidity of the application of it to any person or circumstance, will not affect the validity of the remainder of this Ordinance, or the validity of its application to other persons or circumstances. Section 6. Effective date. This Ordinance will take effect and be in force five days from and after its passage, approval, and publication as provided by law. INTRODUCED: _______________ PASSED: ____________________ APPROVED: _________________ ____________________________ NANCY BACKUS, MAYOR ATTEST: ____________________________ Shawn Campbell, MMC, City Clerk APPROVED AS TO FORM: ____________________________ Jason Whalen, City Attorney Published: _____________________________________________________________ Page 6 of 97 EXHIBIT A—ORD. 7004 ACC 13.06.360 Water service Rates – Generally. A. Except as provided in subsections B and C of this section, e ffective January 1, 2026, the monthly base rate for all water user classifications except interruptible wholesale shall be as set forth in Table 13.06.360-1 below. Table 13.06.360-1. Monthly Charge Meter Size (inches) Effective January 1, 2026 Effective January 1, 2027 Effective January 1, 2028 5/8, 3/4 $ 24.43 $ 26.34 $ 28.39 1 (Single-Family Residential) $ 24.43 $ 26.34 $ 28.39 1 (All Other Classes) $ 27.41 $ 29.55 $ 31.85 1-1/2 $ 29.85 $ 32.18 $ 34.69 2 $ 34.41 $ 37.09 $ 39.98 3 $ 66.18 $ 71.34 $ 76.90 4 $ 83.04 $ 89.52 $ 96.50 6 $ 106.12 $ 114.40 $ 123.32 8 $ 137.09 $ 147.78 $ 159.31 10 $ 194.65 $ 209.83 $ 226.20 Page 7 of 97 Charge per 100 cubic feet (ccf) Customer Class Effective January 1, 2026 Effective January 1, 2027 Effective January 1, 2028 Single-Family Residential: 0 to 7 ccf $ 4.84 $ 5.22 $ 5.63 7.01 to 15 ccf $ 5.92 $ 6.38 $ 6.88 Over 15 ccf $ 6.74 $ 7.27 $ 7.84 Multifamily Residential $ 5.80 $ 6.25 $ 6.74 Commercial $ 6.11 $ 6.59 $ 7.10 Manufacturing/Industrial $ 5.97 $ 6.44 $ 6.94 Schools $ 6.50 $ 7.01 $ 7.56 Municipal/City Accounts $ 6.02 $ 6.49 $ 7.00 Irrigation $ 8.04 $ 8.67 $ 9.35 Wholesale (Algona) $ 2.71 $ 2.79 $ 2.88 Fifty percent shall be added to all rates for water service for customers outside the city limits. City of Auburn utility taxes are included in the monthly rate for all customers except wholesale accounts. Wholesale rates exclude the 50 percent out -of-city service charge and state excise taxes. B. Interruptible wholesale water supply customers shall pay monthly the sum of the following: 1. Standby Service Charge: the cost to maintain, repair, and replace the infrastructure required to provide water utility service to the interruptible wholesale water customer when the customer requests water supply from the city of Auburn. This charge also includes the interruptible wholesale water customer’s proportional share of the peak capacity charge imposed on the City by Tacoma Public Utilities. This is a fixed monthly charge and does not include the delivery of any quantity of water. Page 8 of 97 2. Usage Charge: the cost of water supply. The charge is based on actual water deliveries, if any, during the month times the usage rate. 3. Purchased Water Surcharge: In any month in which water is purchased from Tacoma Public Utilities or other external agency, the interruptible wholesale customer shall pay an additional charge of $2.53 per ccf, applied to the quantity of water purchased by the city of Auburn during the month to supply the interruptible wholesale customer. Interruptible Wholesale Rates Charge Effective January 1, 2026 Effective January 1, 2027 Effective January 1, 2028 Standby Service Charge (per month)* $ 2,131.05 $ 2,141.74 $ 2,153.27 Usage Charge (per ccf) $ 2.49 $ 2.56 $ 2.64 Purchased Water Surcharge (per ccf of water purchased)** $ 2.53 $ 2.53 $ 2.53 * The Standby Service Charge (per month) rates shown are based on the most current information provided to the City by Tacoma Public Utilities for its contracted peak capacity charge per month. Rates may be adjusted as necessary to account for the interruptible wholesale customer’s calculated proportional share of the peak capacity charge when Tacoma Public Utilities releases updates. ** Purchased Water Surcharge rates to change if Tacoma Public Utilities updates its wholesale summer season peaking rate. C. Water customers served by the City’s Braunwood water system. City water customers served by the City’s Satellite Water System for Braunwood Estates (approved by City Resolution 2114) shall be subject to the following monthly water service rates, effective January 1, 2026: Page 9 of 97 Monthly Charge Meter Size (inches) Effective January 1, 2026 Effective January 1, 2027 Effective January 1, 2028 3/4" $ 24.43 $ 26.33 $ 28.39 1” $ 24.43 $ 26.33 $ 28.39 1-1/2” $ 29.85 $ 32.18 $ 34.69 2” $ 34.41 $ 37.09 $ 39.99 3” $ 66.18 $ 71.34 $ 76.90 4” $ 83.04 $ 89.52 $ 96.50 6” $ 106.12 $ 114.40 $ 123.32 8” $ 137.09 $ 147.78 $ 159.31 10” $ 194.65 $ 209.84 $ 226.20 Variable Charges based on ccf (100 cubic feet of water used) Description Effective January 1, 2026 Effective January 1, 2027 Effective January 1, 2028 B1 (0-7 ccf) $ 4.84 $ 5.22 $ 5.62 B2 (7.01-15 ccf) $ 5.92 $ 6.38 $ 6.88 B3 (15.01 – 25 ccf) $ 6.74 $ 7.26 $ 7.83 B4 (25.01-38 ccf) $ 7.47 $ 8.05 $ 8.68 B5 (38+ ccf) $ 14.95 $ 16.12 $ 17.38 Page 10 of 97 EXHIBIT B—ORD. 7004 ACC 13.20.440 Sewer Rates and charges. A. Sewer Rates. The monthly sewer charge to city of Auburn sanitary sewer customers consists of two separate fees. Auburn sanitary sewer utility imposes a charge to maintain, expand and operate the utility’s sewer conveyance facilities, and King County imposes a separate fee for the service King County provides. No charge shall be imposed by the city on the amount charged by King County, which amount the city shall pass directly onto the customer as the cost of the service that King County is providing. The Auburn monthly charge shall be as set forth in Table 13.20.440-1 below. Table 13.20.440-1. City of Auburn Monthly Charge Customer Class Effective January 1, 2026 Effective January 1, 2027 Effective January 1, 2028 Single-Family Residential Rate -- Inside City Limits $ 32.94 $ 33.60 $ 34.27 Single-Family Residential Rate -- Outside City Limits $ 49.41 $ 50.40 $ 51.41 Non-Single-Family Residential Rate -- Inside City Limits for the first 750 cubic feet of water used each month $ 36.13 $ 36.85 $ 37.59 Plus for each additional 100 cubic feet thereafter $ 3.66 $ 3.73 $ 3.80 Non-Single-Family Residential Rate -- Outside City Limits for the first 750 cubic feet of water used each month $ 54.20 $ 55.28 $ 56.39 Plus for each additional 100 cubic feet thereafter $ 5.49 $ 5.60 $ 5.70 Page 11 of 97 Commercial accounts will be allowed to average winter water consumption for the billing dates falling between December through May to determine the summer sewer rates for the billing dates falling between July and October. Said allowance shall be upon application and with appropriate justification that additional summer usage does not enter the sewer system. The months of November through June shall be billed per water used, at the rates noted above. Commercial accounts without city water service shall be charged at the published rate based on a city-approved water meter or other acceptable means of recording water use. The meter shall be read by the city to determine sewage charges on commercial private water systems. Commercial accounts that have industrial use of domestic water that is not discharged into the sanitary sewer system may request a deduct meter to measure the water that is actually discharged to the sewer system. The customer will be allowed to deduct the amount of water usage that is not discharged to the sanitary sewer system. Irrigation meters shall not be billed for sanitary sewer service. B. Permit Fees. Permit fees for side sewer repair, replacement, inspection, or installation of side sewers shall be as shown in the city of Auburn fee schedule. Page 12 of 97 EXHIBIT C—ORD. 7004 ACC 13.48.100 Storm Water Rates. A. The customer classes and rates below are based upon the cost of services provided by the storm utility. The storm water rates shall be as set forth in Table 13.48.100 -1 below. Table 13.48.100-1. ESU1 Rate per Month Customer Class Effective January 1, 2026 Effective January 1, 2027 Effective January 1, 2028 Single-Family Residential Parcels and Two-Family Residential Parcels $ 19.94 $ 20.59 $ 21.26 Single-Family with Detention and Water Quality Treatment $ 15.56 $ 16.07 $ 16.59 Non-Single-Family $ 19.94 $ 20.59 $ 21.26 Non-Single-Family with Detention $ 17.16 $ 17.72 $ 18.30 Non-Single-Family with Retention $ 14.37 $ 14.84 $ 15.32 Non-Single-Family with Water Quality Treatment $ 18.34 $ 18.94 $ 19.56 Non-Single-Family with Detention and Water Quality Treatment $ 15.56 $ 16.07 $ 16.59 Non-Single-Family with Retention and Water Quality Treatment $ 12.77 $ 13.19 $ 13.62 1 An “equivalent service unit (ESU)” is defined in ACC 13.48.010 as 2,600 square feet of impervious surface. The customer classes set forth in this subsection shall be applicable only if the qualifying on-site facilities have met applicable city standards upon installation, have received city approval of construction, and are in conformity with the applicable Page 13 of 97 operations and maintenance standards. If the city determines that the operation and maintenance standards are not being complied with, the customer class shall be determined to be that of non-single-family only, until operation and maintenance of the facilities meet city standards. The customer being billed may apply in writing for a system inspection. If the inspection shows that the facilities meet city standards, the customer will be reclassified to the previous class. B. Developed Parcels. Only developed parcels containing impervious surfaces as defined in ACC 13.48.010 shall be charged. C. Multiple Class Accounts. When a developed non-single-family parcel contains more than one customer class, the appropriate rate for each customer class will be calculated, and the aggregate total summed for billing. Page 14 of 97 Slide 1 City of Auburn Utility Rate Study November 10, 2025 Page 15 of 97 Slide 2 Presentation Overview ●Background ●Summary of findings »Revenue requirement –Low-income revenue impact »Cost of service »Rate design – stormwater update ●System Development Charges ●Wholesale Rates ●Next steps ●Question / discussion Page 16 of 97 Slide 3 Rate Setting Background ●Comprehensive rate study update commenced in 2025 »10.27.25 - Revenue requirement and COSA results presented to Council »Today’s focus: –Revenue requirement summary –Cost of service summary –Stormwater rate design update –System development charge findings Page 17 of 97 Slide 4 Revenue Requirement Summary Page 18 of 97 Slide 5 Revenue Requirement Summary Sample Water Bill Existing 2026 2027 2028 2029 2030 2031 Proposed Increases 7.80%7.80%7.80%7.80%7.80%3.75% Sample Residential Mo. Bill 49.60$ 53.47$ 57.64$ 62.14$ 66.98$ 72.21$ 74.91$ $ Difference 3.87$ 4.17$ 4.50$ 4.85$ 5.22$ 2.71$ Note: assumes 3/4" or smaller meter and 6 ccf of monthly usage Sample Sewer Bill Existing 2026 2027 2028 2029 2030 2031 Proposed Increases - City Portion 2.00%2.00%2.00%2.00%2.00%2.00% Sample Residential Mo. Bill - Auburn 32.29$ 32.94$ 33.59$ 34.27$ 34.95$ 35.65$ 36.36$ $ Difference 0.65$ 0.66$ 0.67$ 0.69$ 0.70$ 0.71$ Sample Residential Mo. Bill - KC 58.28$ 62.66$ 70.65$ 79.66$ 90.42$ 102.63$ 116.49$ $ Difference 4.38$ 7.99$ 9.01$ 10.76$ 12.21$ 13.86$ Sample Residential Mo. Bill - Total 90.57$ 95.60$ 104.24$ 113.93$ 125.37$ 138.28$ 152.85$ $ Difference 5.03$ 8.65$ 9.68$ 11.45$ 12.91$ 14.57$ Sample Stormwater Bill Existing 2026 2027 2028 2029 2030 2031 Proposed Increases 3.25%3.25%3.25%3.25%3.25%3.25% Sample Residential Mo. Bill 19.31$ 19.94$ 20.59$ 21.25$ 21.95$ 22.66$ 23.39$ $ Difference 0.63$ 0.65$ 0.67$ 0.69$ 0.71$ 0.74$ Page 19 of 97 Slide 6 Combined Residential Sample Bill Notes: 1. Water bill assumes 6 ccf of usage 2. Sewer bill does not include King County portion Utility Existing 2026 2027 2028 2029 2030 2031 Water 49.60$ 53.47$ 57.64$ 62.14$ 66.98$ 72.21$ 74.91$ Sewer (local charge only)32.29 32.94 33.59 34.27 34.95 35.65 36.36 Storm 19.31 19.94 20.59 21.25 21.95 22.66 23.39 Avg. Res. Mo. Bill 101.20$ 106.34$ 111.82$ 117.66$ 123.88$ 130.52$ 134.67$ $ Mo. Difference 5.14$ 5.48$ 5.84$ 6.22$ 6.64$ 4.16$ % Difference 5.08%5.15%5.22%5.29%5.36%3.19% Page 20 of 97 Slide 7 Low Income Rate Impacts ●Assumed impacts from 1,000 customers and rate discount of 50% »Administration may require an additional FTE and costs would need to be incorporated ●Recommendation: »Research in 2026 »Consider implementing in 2027/2028 budget process Sample Water Bill Existing 2026 2027 2028 Proposed Increases 9.42%7.80%7.80% Sample Residential Mo. Bill 49.60$ 54.27$ 58.51$ 63.07$ $ Difference 4.67$ 4.23$ 4.56$ Note: assumes 3/4" or smaller meter and 6 ccf of monthly usage Sample Stormwater Bill Existing 2026 2027 2028 Proposed Increases 4.11%3.25%3.25% Sample Residential Mo. Bill 19.31$ 20.10$ 20.76$ 21.43$ $ Difference 0.79$ 0.65$ 0.67$ Sample Sewer Bill Existing 2026 2027 2028 Proposed Increases - City Portion 3.68%2.00%2.00% Sample Residential Mo. Bill - Auburn 32.29$ 33.48$ 34.15$ 34.83$ $ Difference 1.19$ 0.67$ 0.68$ Water Sewer Stormwater Revenue Impact (351,428)$ (198,405)$ (120,104)$ Rate impact on customer base 1.62%1.68%0.86% Average Mo. Single Family Bill 53.47$ 32.94$ 19.94$ Monthly Impact 0.80$ 0.54$ 0.16$ 2026 Projected Low Income ImpactDescription Page 21 of 97 Slide 8 Cost of Service Summary Page 22 of 97 Slide 9 Water COSA Results ●±10% within COSA range of reasonableness »All classes within range of reasonableness 98.11%98.31%102.04%107.28%103.94% 0.00% 20.00% 40.00% 60.00% 80.00% 100.00% Single Family Multifamily Commercial Maunfacturing Irrigation COSA Results 90%Target 110% Page 23 of 97 Slide 10 Sewer COSA Results ●±10% within COSA target range of reasonableness »All classes are within the range of reasonableness 108.72%92.79% 0.00% 20.00% 40.00% 60.00% 80.00% 100.00% 120.00% Single Family Non Single Family COSA Results 90%Target 110% Page 24 of 97 Slide 11 Stormwater COSA Results ●±10% within COSA range of reasonableness »All classes within range of reasonableness 101.03%102.02%99.16%95.14%102.87%99.87%95.49% 0.00% 20.00% 40.00% 60.00% 80.00% 100.00% 120.00% Single Family NSF ESU NSF w/Det ESU NSF w/Ret ESU NSF w/WtrQlty ESU NSF w/Det&WQ ESU NSF w/Ret&WQ ESU COSA Results 90%Target 110% Page 25 of 97 Slide 12 Rate Design Update Page 26 of 97 Slide 13 ●Evaluated new SF credit applicable to customers with »On-site stormwater detention »Water quality infrastructure ●685 accounts qualify for credit »0.26% revenue impact ●No other rate structure changes »Equal increases applied to each customer class Proposed Stormwater Rates 2026 2027 2028 Single Family 19.31$ 19.94$ 20.59$ 21.26$ Single Family w/Det&WQ 15.56$ 16.07$ 16.59$ NSF ESU 19.31 19.94 20.59 21.26 NSF w/Det ESU 16.62 17.16 17.72 18.30 NSF w/Ret ESU 13.92 14.37 14.84 15.32 NSF w/WtrQlty ESU 17.76 18.34 18.94 19.56 NSF w/Det&WQ ESU 15.07 15.56 16.07 16.59 NSF w/Ret&WQ ESU 12.37 12.77 13.19 13.62 Monthly Fixed Charges All Classes Description Existing Proposed Page 27 of 97 Slide 14 System Development Charges Page 28 of 97 Slide 15 What Is a System Development Charge? ●One time charge imposed on new development or expanded connection to system ●Revised Code of Washington (RCW) 35.92.025 grants Cities the authority to fix rates and charges for connecting to water & wastewater systems ●Represents a pro rata share of the cost of providing system capacity ●Based on cost of system infrastructure investment »Allows for both existing and future costs »May not be used to recover operation and maintenance costs ●Consists of two parts »Existing cost basis: intends to recognize the current ratepayers’ net investment in the original cost of the non-donated system »Future cost basis: intends to include future facilities needed to serve growth, including regulatory system improvements ●Last time system development charges were updated was in 2014 »CCI index has been applied annually since 2014 Page 29 of 97 Slide 16 ●Existing costs »Existing assets (original cost) »less: contributions (dev. / grants) »less: provision for asset retirement »plus: interest (maximum 10 years) »less: net debt principal outstanding ●Future costs »Future capital cost (today’s dollars) »less: ineligible projects (plans / studies) »less: contributions (dev. / grants) Methodology EXISTING COST BASIS CURRENT & FUTURE CAPACITY FUTURE COST BASIS System Development Charge Page 30 of 97 Slide 17 Existing Cost Basis Calculation Component Characteristics Water Sewer Stormwater 1. Original Cost of Current Assets Based on inventory of City assets through 2024.$183.1M $118.2M $107.2M 2. Less: Contributions In Aid of Construction Excluding assets that were funded by other entities or fees.($39.7M)($48.6M)($28.0M) 3. Plus: Interest RCW allows for inclusion of up to ten years of interest on each asset, not to exceed the original cost of the asset. $50.6M $29.8M $30.2M 4. Less: Provision for Asset Retirement Accounts for the replacement of existing assets in the future capital plan ($17.7M)($14.2M)(9.1M) 5. Less: Debt Principal Outstanding Excluded since customers will pay for their share of debt service through user rates. ($3.2M)-- Total Existing Cost Basis $173.1M $85.2M $100.3MPage 31 of 97 Slide 18 Future Cost Basis Calculation Component Characteristics Water Sewer Stormwater 1. Capital Improvement Plan (CIP) Projects identified in the City’s capital improvement plan. All project costs in today’s dollars. $200.7M $68.4M $61.6M 2. Less: Grants & Developer Contributions Projects that receive grant or developer contributions within the City’s capital improvement plan. ($2.5M)-($0.5M) Total Future Cost Basis $198.2M $68.4M $61.1M Page 32 of 97 Slide 19 System Capacity Water Total system capacity: 36,624 MCEs Based on comprehensive plan system capacity analysis by function 37% future available capacity Sewer Total system capacity: 42,792 RCEs Based on comprehensive plan flow forecast through 2044 25% future available capacity Stormwater Total system capacity: 91,104 ESUs Based on the same flow growth rate as sewer 25% future available capacity Notes: MCE = Meter Capacity Equivalent, or meter size RCE = Residential Capacity Equivalent ESU = Equivalent Service Unit Page 33 of 97 Slide 20 SDC Calculation Cost Basis Applicable Customers Water Sewer Stormwater Existing Cost Basis Current & Future Capacity by Function $4,745 $1,992 $1,101 Future Cost Basis Current & Future Capacity by Function $5,382 $1,598 $671 Total SDC per MCE/RCE/ESU $10,127 $3,590 $1,772 Notes: MCE = Meter Capacity Equivalent, or meter size RCE = Residential Capacity Equivalent ESU = Equivalent Service Unit Existing SDC: $9,725 $3,608 $1,791 Inc./Dec. +$402 -$18 -$19 Total Increase for New SF Connection = $365 Page 34 of 97 Slide 21 SDC Charge Basis ●Water SDC will be determined by meter capacity equivalents (MCEs) »¾ meter = $10,127 »Charges increase for larger meters and are related to the flow capacity of the meter ●Sewer SDC will be calculated based on residential capacity equivalents (RCEs) »1 single family residence = 1 RCE »1 RCE = $3,590 »Non-residential RCEs are calculated based on # of fixture units and projected flow ●Stormwater SDC will be calculated based on equivalent service units (ESUs) »1 single family residence = 1 ESU »1 ESU = $1,772 »1 ESU = 2,600 sq. ft. of impervious surface area »Non-residential ESUs are calculated based on amount of impervious surface area and definition of ESU ●Calculated charges are “maximum allowable” ●Recommended to adjust annually by an accredited inflation index (e.g., ENR CCI) Page 35 of 97 Slide 22 SDC Survey - Water * Jurisdiction requires payment of an additional Cascade Water Alliance Regional Capital Facilities Charge in addition to SDC Page 36 of 97 Slide 23 SDC Survey - Sewer * Jurisdiction requires payment of an additional King County Sewer Capacity Charge in addition to SDC Page 37 of 97 Slide 24 SDC Survey - Stormwater Page 38 of 97 Slide 25 Wholesale Rates Page 39 of 97 Slide 26 Wholesale Background ●Last wholesale rate update part of greater utility rate study completed in 2022 »Per agreements “Auburn has created a customer classification for wholesale customers, and rates for service charges for wholesale customers shall be based on a rate study for the wholesale customer classification.” “Wholesale water rates shall be based on costs of providing the service.” ●Two wholesale customers »City of Algona – continual service wholesale customer »Lake Meridian Water District (LMWD) – interruptible “ready to serve” upon request Page 40 of 97 Slide 27 Wholesale Rate Methodology ●Current update uses the previously established wholesale rate study methodology ●Using industry* accepted practice – “utility basis” methodology ●Methodology includes »Operating Costs – costs related to ongoing maintenance and operation of eligible assets »Annual depreciation – of the facilities required to deliver service, related to the loss in value of facilities due to wear and tear, decay, and obsolescence »Return - to provide a fair rate of return for the past investment made to finance facilities used to provide water service *American Water Works Association Principles of Water Rates, Fees and Charges, M1 Manual Page 41 of 97 Slide 28 Algona Wholesale Water Rates ●Charges composed of: »Fixed meter charge, by size »Usage charge per hundred cubic feet 2027 2028 Meter Charge (per month, per meter) 8-inch (4)127.17$ 137.09$ 147.78$ 159.31$ Charge per 100 cubic feet (ccf)2.51$ 2.71$ 2.79$ 2.88$ Description Existing Charges Cost of Service 2026 Proposed Page 42 of 97 Slide 29 Lake Meridian Water District Rates ●Fixed ready to serve: »Charged each month »Recovers the cost to maintain delivery assets and provide the ability to serve when requested »Includes a portion of Tacoma read to serve charge ●Usage Charge: »Delivery rate for using City of Auburn sources »2026 cost of service assumes no actual water deliveries ●Purchased Water Surcharge: »Applied to water purchased from Tacoma for delivery to LMWD »Includes Tacoma peaking rate & portion of ready to serve charge 2027 2028 Standby Charge per month 1,592.61$ 2,131.05$ 2,141.74$ 2,153.27$ Usage Charges: Usage Charge - per 100 cubic feet (ccf)2.24$ 2.49$ 2.56$ 2.64$ Purchased Water Surcharge - per ccf of water purchased from Tacoma 1.82$ 2.53$ 2.53$ 2.53$ Description Existing Charges Cost of Service 2026 Proposed Page 43 of 97 Slide 30 Next Steps ●Direction / feedback »Move forward with updated SDCs –Water: $10,127 per MCE –Sewer: $3,590 per RCE –Stormwater: $1,772 per ESU »Adjust wholesale rates to cost of service ●Next steps »Adopt rates and SDCs effective January 1, 2026 Page 44 of 97 Slide 31 Thank you! Questions? Brooke Tacia, Project Manager (425) 502-6445 Brooke.tacia@bowman.com www.fcsgroup.com Page 45 of 97 AGENDA BILL APPROVAL FORM Agenda Subject: Meeting Date: Ordinance No. 7008 (Thomas) (10 Minutes) An Ordinance amending Sections 3.60.010 and 3.60.020 of the Auburn Municipal Code to authorize an additional one tenth of one percent Sales and Use Tax for Criminal Justice purposes in accordance with Section 201, Chapter 350, Laws of 2025, providing for severability, and establishing an effective date November 10, 2025 Department: Attachments: Budget Impact: Finance Ordinance No. 7008, 2025 .1% Sales TAx Administrative Recommendation: For discussion only. Background for Motion: Background Summary: Proposed Ordinance No. 7008 authorizes the City to enact an additional 0.1% sales and use tax as permitted under RCW 43.101.540. This statute allows cities to impose the tax to support local criminal justice efforts. The proposed tax is projected to generate approximately $2.7 million annually to help fund the City’s police, jail, human services, and public defense operations. Public safety costs have continued to rise faster than general fund revenues. The additional tax would help (1) reduce pressure on existing general fund resources and (2) provide funding for critical police department technology and infrastructure upgrades. Upon adoption of the Ordinance, the City must apply to the Washington State Criminal Justice Training Center (WSCJTC) and demonstrate compliance with the eligibility requirements established under RCW 43.101.540. Adoption of this Odinance does not commit the Council to any specific spending programs beyond 2026. If approved, the City anticipates beginning tax collection on April 1, 2026, resulting in an estimated $2 million increase in revenue, which is currently proposed and reflected in the mid-biennial budget amendment. Further allocation of funds will be determined during the 2027–2028 Biennial Budget process to identify specific programs supported by this revenue. Councilmember: Kate Baldwin Staff: Jamie Thomas Page 46 of 97 -------------------------------- Ordinance No. 7008 November 10, 2025 Page 1 of 4 ORDINANCE NO. 7008 AN ORDINANCE OF THE CITY OF AUBURN, WASHINGTON, AMENDING SECTIONS 3.60.010 AND 3.60.020 OF THE AUBURN MUNICIPAL CODE TO AUTHORIZE AN ADDITIONAL ONE TENTH OF ONE PERCENT SALES AND USE TAX FOR CRIMINAL JUSTICE PURPOSES IN ACCORDANCE WITH SECTION 201, CHAPTER 350, LAWS OF 2025, PROVIDING FOR SEVERABILITY, AND ESTABLISHING AN EFFECTIVE DATE WHEREAS, the Legislature enacted House Bill 2015 in the 2025 legislative session to provide qualified cities, towns, or counties to authorize, by Resolution or Ordinance, a new local option sales and use tax of one-tenth of one percent (0.1%) for criminal justice purposes; and WHEREAS, the City Council seeks to enhance criminal justice funding; and WHEREAS, the City’s cost of maintain public safety services continues to outpace the growth of general fund sources that directly support public safety operations; and WHEREAS, the sales and use tax authorized will represent a significant additional source of funding to address public safety needs in the City; and WHEREAS, imposing the sales and use tax in furtherance of programs and services allowed by Section 201, Chapter 350, Laws of 2025, including addressing high- priority community safety needs; and WHEREAS, the City Council finds that the city, through its law enforcement agency, the Auburn Police Department, meets the requirements to receive a grant from Page 47 of 97 -------------------------------- Ordinance No. 7008 November 10, 2025 Page 2 of 4 the Local Law Enforcement Grant Program created in Section 101, Chapter 350, Laws of Washington 2025; and WHEREAS, the city voters have not repealed by referendum the criminal justice sales tax imposed pursuant to RCW 82.14.340 or rejected a ballot proposition to impose the public safety sales tax authorized by RCW 82.14.450 in the previous 12 months; NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF AUBURN, WASHINGTON, DO ORDAIN AS FOLLOWS: SECTION 1. The City Council finds that the City meets the eligibility requirements to impose the sales and use tax authorized by Section 201, Chapter 350, Laws of 2025, and if there were any documentation deficiencies identified by the CJTC, such deficiencies will be rectified. SECTION 2. All portions of the Auburn Municipal Code in this Ordinance that are not shown in strikethrough and underline edits or are not explicitly repealed herein remain in effect and unchanged. SECTION 3. Section 3.60.010 of the Auburn Municipal Code is amended to add a new subsection C to read as follows: C. There is hereby imposed an additional sales or use tax upon every taxable event, as defined in RCW 82.14.020, occurring within the City, as authorized by Section 201, Chapter 350, Laws of 2025. Money collected under this subsection must be used for criminal justice purposes, as defined Page 48 of 97 -------------------------------- Ordinance No. 7008 November 10, 2025 Page 3 of 4 in Section 201, Chapter 350, Laws of 2025 (or as may be amended in the future). SECTION 4. Section 3.60.020 of the Auburn Municipal Code is amended to add new subsections C and D to read as follows: C. The tax imposed under AMC 3.60.010 C is assessed on the selling price in the case of a sales tax, or value of the article used, in the case of a use tax. The rate of such tax imposed shall be one-tenth of one percent, as allowed under Section 201, Chapter 350, Laws of 2025 (or as may be amended in the future). D. To the extent an additional sales tax imposed by the City would cause the total rate of tax for sales of lodging to exceed the maximum amount allowed by RCW 82.14.410, sales of lodging shall be exempt from the portion of the tax that would be prohibited by Chapter 82.14 RCW. SECTION 5. Upon approval of the City Attorney, the City Clerk is authorized to direct the codifier to make necessary corrections to this Ordinance, including the corrections of scriveners or clerical errors; references to other local, state, or federal laws, codes, rules, or regulations; or ordinance numbering and section/subsection numbering and references. The City Clerk is further authorized to direct the codifier to update any chapter, section, or subsection titles in the Auburn Municipal Code affected by this Ordinance, and to replace references to Section 201, Chapter 350, Laws of 2025 with applicable RCW section references as such sections are codified. Page 49 of 97 -------------------------------- Ordinance No. 7008 November 10, 2025 Page 4 of 4 SECTION 6. If any section, subsection, sentence, clause, phrase, or word of this Ordinance should be held to be invalid or unconstitutional by a court of competent jurisdiction, such invalidity or unconstitutionality thereof shall not affect the constitutionality of any other section, subsection, sentence, clause, phrase, or word of this Ordinance. SECTION 7. This Ordinance shall be in full force and effect five (5) days after publication of a summary of this Ordinance in the City's official newspaper, the additional tax imposed in Sections 3 and 4 shall apply to taxable events occurring on or after April 1, 2026. The summary shall consist of this Ordinance's title. INTRODUCED: _______________ PASSED: ____________________ APPROVED: _________________ ____________________________ NANCY BACKUS, MAYOR ATTEST: ____________________________ Shawn Campbell, MMC, City Clerk APPROVED AS TO FORM: ____________________________ Jason Whalen, City Attorney Published: _____________________________________________________________ Page 50 of 97 Ordinance 7008 .1% Public Safety Sales and Use Tax CITY COUNCIL STUDY SESSION NOVEMBER 10, 2025 Page 51 of 97 HB 2015 Details HB 2015 is public safety funding law that allows qualifying cities to: •Impose an additional .1% sales and use tax for criminal justice purposes; and/or •Apply for grants that support hiring, training, and retaining officers Enacting the .1% sales and use tax can be done through councilmanic action The City must meet eligibility criteria and apply through the Washington State Criminal Justice Training Center (WSCJTC) to collect the tax without penalty and/or to apply for the grant Allowable sales and use tax uses: domestic violence services, public defenders, diversion and reentry programs, programs to reduce homelessness and improve behavioral health, community  outreach and assistance programs, mental health crisis response, alternative response programs, and community placements for juvenile offenders. The .1% public safety sales and use tax is not new – it’s now just easier for cities to impose Page 52 of 97 Requirements for Imposing the Sales and Use Tax – RCW 43.101.540 Issue and implement policies consistent with: •RCWs 43.17.425 and 10.93.160 •Office of the attorney general’s keep Washington working act guide; and •Model policies and training recommendations for state and local enforcement agencies •Specifically, policies and practices regarding use of force and de-escalation tactics, and training addressing firearm relinquishment pursuant to court orders Participate in training as required by RCWs 43.101.455 and 36.28A.445 Implement use of force data collection and reporting 25% officer completion rate with the commission’s 40-hour crisis intervention team training 100% officer completion rate for officers required to complete  trauma-informed, gender-based violence interviewing, investigation, response, and case review training developed or approved by the commission pursuant to RCW 43.101.272 and 43.101.276 A police Chief who has not been convicted of a felony, certain gross misdemeanors, and has not implemented policies or practices that allow volunteers to assist with law enforcement activities Page 53 of 97 Application for Sales and Use Tax Qualification Verification Upon adoption by Council, PD will complete and submit the application for verification with WSCJTC WSCJTC has 45 days to review submissions and provide feedback The City has 30 days to respond and provide additional details or clarifying documentation and up to 180 days to prove compliance •After the 180 days if the City still can’t demonstrate compliance, the State Treasurer will withhold  $100,000 of the tax collected, per month, until WSCJTC has verified compliance DOR – who collects sales and use tax on behalf of the City – requires a 75-calendar day notice of  change and changes can take effect January 1, April 1, or July 1. Page 54 of 97 Increasing Public Safety Costs and Needs Immediate needs for 2025 and 2026 (as presented in the mid-biennial budget amendment –  Ord. 7000): Future needs for consideration (2027 and beyond): ◦Potential continued increases to SCORE: $500,000 ◦Enhanced PD technology needs: $575,000 ◦Potential continued increases for public defense contracts: $175,000 ◦Additional Debt Service for new public safety building: $1.4 million Page 55 of 97 Revenue Impacts The current tax rate in the City of Auburn is 10.3% (KC imposed their .1% public safety sales and use tax option and Jan.1 the rate will be 10.4%) Of the current 10.3%, the city only collects .95%, or $.09 of every $1.00 paid in sales tax Every .1% generates approximately $2.7 million* in tax revenue to the City *With recent sales and use tax law changes over certain professional services, the cities taxable base will be increasing in 2026 Page 56 of 97 Tax Rate Comparisons as of Q4 2025 *Assumes median income of $95,367 and spends 20% of their gross income on sales taxable items A .1% increase = $19.07 additional tax paid per year/per tax payer* Page 57 of 97 Next Steps: If Council decides to move forward with Ord. 7008: ◦11/17/ 2025: Adopt .1% Public Safety Sales and Use Tax (Ord. 7008) ◦11/17/ 2025: Adopt Mid-Biennial Budget Amendment (Ord. 7000) with new $2 million in 2026 ◦Apply for the Sales and Use Tax Authorization with WSCJTC ◦Send signed tax ordinance to DOR to begin collections April 1, 2026 ◦Continue to refine how to dedicate the new .1% in the 2027/2028 biennial budget If Council decides not to move forward with Ord. 7008: ◦11/17/2025: Adopt Mid-Biennial Budget Amendment (Ord. 7000) without new $2 million in 2026 Page 58 of 97 AGENDA BILL APPROVAL FORM Agenda Subject: Meeting Date: Ordinance No. 7000 (Thomas) (30 Minutes) An Ordinance amending the City's 2025-2026 Biennial Budget November 10, 2025 Department: Attachments: Budget Impact: Finance Ordinance No. 7000, Ord No. 7000 BA#3 Transmittal Memo, 2025 BA#3 Ord No 7000 Schedule A, 2025 BA#3 Ord No 7000 Schedule B, 2026 BA#3 Ord No 7000 Schedule C, 2026 BA#3 Ord No 7000 Schedule D, 2025 Mid- Biennial Review Power Point Administrative Recommendation: For discussion only. Background for Motion: Background Summary: Ordinance No. 7000 (Budget Amendment #3) represents the third Budget Amendment for the 2025- 2026 Biennium. This amendment consists of adjustments to capital project budgets; recognition of new grant awards and adjustments of estimated grant awards and their associated expenditures; and new expenditures offset by new revenues, adjustments to existing programs, and limited requests for new budget authority. For details, see the attached transmittal memorandum and supporting materials. Councilmember: Kate Baldwin Staff: Jamie Thomas Page 59 of 97 ------------------------- Ordinance No. 7000 November 4, 2025 Page 1 of 2 ORDINANCE NO. 7000 AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF AUBURN, WASHINGTON, AMENDING THE CITY’S 2025-2026 BIENNIAL BUDGET WHEREAS, at its November 18, 2024, regular meeting, the Auburn City Council enacted Ordinance No. 6848, which adopted the City’s 2025-2026 Biennial budget (Budget); and WHEREAS, the City Council has amended the Budget two times since adoption (by enacting Ordinance No. 6975 on May 19, 2025, and Ordinance No. 6991 on August 4, 2025); and WHEREAS, the City deems it necessary to amend the Budget to appropriate additional funds into the various Budget funds outlined in the schedules attached to this Ordinance; and WHEREAS, the City Council has approved this Ordinance by one more than its majority in accordance with RCW 35A.34.200. NOW THEREFORE, THE CITY COUNCIL OF THE CITY OF AUBURN, WASHINGTON DO ORDAIN AS FOLLOWS: Section 1. Amendment of the 2025-2026 Biennial Budget. Pursuant to RCW 35A.34, the City hereby amends its 2025-2026 Biennial Budget to reflect the revenues and expenditures shown on Schedules “A”, “B”, “C” and “D” attached hereto and incorporated herein by reference. Section 2. Implementation. The Mayor is authorized to utilize the revenue and expenditure amounts shown on Schedules “A”, “B”, “C” and “D” attached to this Page 60 of 97 ------------------------- Ordinance No. 7000 November 4, 2025 Page 2 of 2 Ordinance. A copy of these Schedules are on file with the City Clerk and available for public inspection. The Mayor is further authorized to implement those administrative procedures necessary to carry out the directives of this legislation. Section 3. Severability. The provisions of this Ordinance are declared to be separate and severable. The invalidity of any clause, sentence, paragraph, subdivision, section, or portion of this Ordinance, or the invalidity of the application of it to any person or circumstance, will not affect the validity of the remainder of this Ordinance, or the validity of its application to other persons or circumstances. Section 4. Effective date. This Ordinance will take effect and be in force five days from and after its passage, approval, and publication as provided by law. INTRODUCED: PASSED: APPROVED: ____________________________ NANCY BACKUS, MAYOR ATTEST: APPROVED AS TO FORM: ____________________________ ____________________________ Shawn Campbell, MMC, City Clerk Jason Whalen, City Attorney Published: _________________________________________________________ Page 61 of 97 Interoffice Memorandum To: City Council From: Jamie Thomas, Finance Director CC: Nancy Backus, Mayor Date: November 10, 2025 Re: Ordinance #7000 – 2025-2026 Budget Amendment #3 The City’s biennial 2025-2026 budget was approved by Council as two one-year appropriations. Budget Amendment #3 will be the third budget amendment for the biennium and will update the 2025 and 2026 appropriations. Although the 2026 appropriation is being adjusted, this is generally due to the effects of adjustments to the 2025 appropriation, since any adjustment to the ending balance of 2025 must be reflected in 2026. Given this, the detail below relates to the 2025 appropriation. For details on specific requests to amend the biennial budget, please refer to the accompanying Schedule A, Summary of 2025 Budget Adjustments by Fund and Schedule C, Summary of 2026 Budget Adjustments by Fund. The purpose of this budget amendment is to: 1. Adjust capital expenditure budgets; and 2. Recognize grant awards and their associated expenditures, and adjust estimated amounts to awarded amounts when necessary; and 3. Adjust operational expenditures. Net Effects on 2025 Fund Balance: The fund balance (or ending working capital for proprietary funds) of a fund is affected when revenues and expenditures within a fund are not equal. If revenues exceed expenditures, fund balance increases; if expenditures exceed revenues, fund balance decreases. Budget Amendment No. 3 has the following effects on fund balance by fund type: • General Fund (Fund 001) $ -14,070,769 • Special Revenue Funds (Funds 1*) 13,222,500 • Governmental Capital Funds (Funds 3*) 1,426,239 • Enterprise Funds (Funds 4*) -250,721 • Internal Service Funds (Funds 5*) -340,261 • Agency Funds (Funds 6*) -35,000 NET EFFECT ON FUND BALANCE $ -48,012 Page 62 of 97 Adjust capital project budgets: These requests represent changes to project budgets to align with updated timelines and project scopes in accordance with strategic planning. Shown below is the additional expenditure authority requested, along with the additional expenditure authority and net effect on citywide fund balance: • M&O Facility Improvements (cp2107)1 $ 400,000 • Move funding from Postmark to Theater Park Plaza (cp2507)2 100,000 • Undercover vehicle purchase 61,000 • Purchase new Cemetery gator3 38,000 • Project funding adjustments4 0 NEW EXPENDITURE AUTHORITY $ 599,000 PROJECT FUNDING ADJUSTMENTS $ 1,920,274 NET EFFECT ON FUND BALANCE $ -561,000 Grant awards and adjustments: These requests recognize the receipt of new grants not previously budgeted, true-ups of previously approved grant budgets to award amounts, and authorization of associated grant expenditures. As such, there is generally a net zero effect on fund balance for these requests. What is shown below is the additional expenditure authority requested, which in each case is offset by a corresponding adjustment to revenue. The PSE grant reimburses prior expenditures with no additional authority requested, resulting in an increase to fund balance. These requests include: • WSDOT: Downtown Bike to Transit (cp2509) $ 1,924,000 • FAA: AWOS, Beacon & Emergency Generator (cp2335) 1,647,537 • King County ILA: 124th Ave SE Transit Imp (cp2515) 1,056,680 • Dept. of Commerce: Downtown Theater Design/Const. (cp2414) 485,000 • AWC: Alternative Response Team (pd2507) 100,000 • PSE: Conservation (cp2108) 0 • Other grants (six total)5 205,836 NEW EXPENDITURE AUTHORITY $ 5,419,053 NET EFFECT ON FUND BALANCE $ 226,239 1 Covers furniture, fixtures and equipment not included in the original contract but required to operation the facility. 2 Reallocates funding from a completed project and adds an additional $100,000 of King County Park Levy funding. 3 Adds expenditure authority which is offset by increased revenues, so there is no effect on fund balance. 4 Several projects are changing funding sources with no effect on overall expenditure authority: Facilities Master Plan ($1.7M of F328 fund balance changed to Cumulative Reserve), 12th St. property purchase ($53.8k F328 fund balance to REET 1), Public Art purchase and Lea Hill Safe Routes to School ($140,196 and $80,990 F328 fund balance to REET 2). The Downtown Infrastructure project is being reallocated from F330 exclusively to F330, F328 and F102 to more accurately classify expenditures (overall expenditure authority for the project is unchanged). Centennial Viewpoint Park art will be purchased from F328 rather than the General Fund (transfer from GF to F328). Remaining funds from Auburn Ave. Theater Demo will be moved to Auburn Avenue Theater Rebuild (move $34,382 from F330 to F328). A WSDOT grant was erroneously budgeted in F328 and will be moved to F102 ($6,500). 5 Dept. of Ecology Local Solid Waste Financial Assistance ($95,765), WA Office of Public Defense SPAR grant ($60,000), WTSC High Visibility Enforcement grant ($21,886), KC Sheriff’s Office RSO grant ($14,725), 4Culture equipment grant ($13,460). Page 63 of 97 Adjust Operating Budget: These requests represent changes to the operating budget due to revisions of existing budget authority and requests for new budget authority. • Transfer funds from the General Fund to Cumulative Reserve $ 15,000,000 • Reimburse F550 for equipment cost overruns6 1,421,276 • Transfer non-TBD funds from F105 to F1027 1,122,767 • Increase medical and time loss claim budget 420,000 • Increase solid waste utility tax payments 350,000 • Increase public defense expense 325,000 • Add Drinking Water Revolving Fund Loan debt service 249,882 • Increase Parks irrigation budget 200,000 • Replace Golf Course furnace8 170,000 • Increase police fleet expansion costs9 156,000 • Increase SCORE jail expense 165,000 • Decrease sewer excise tax expense -400,000 • Other operating adjustments (eight total)10 273,007 NEW EXPENDITURE AUTHORITY $19,452,932 NET EFFECT ON FUND BALANCE $ 286,749 Requests With 2026 Effects Only: All previous requests are effective as of 2025, many with follow-on effects in 2026. The following requests only affect the 2026 budget and have no effect in 2025. • Increase annual HVAC maintenance 140,000 • Implement golf course facility improvement fee 106,000 • Increase annual generator preventive maintenance 80,000 • Consolidate parks security contracts to Facilities fund 78,000 • Consolidate cemetery security contracts to Facilities fund $ 18,240 NEW EXPENDITURE AUTHORITY $ 422,240 NET EFFECT ON FUND BALANCE $ -111,620 6 Expense includes movement of funds to F550. Net effect on fund balance is -$762,769. 7 Beginning in 2025, F105 is only used to house Transportation Benefit District funds. No effect on fund balance. 8 Expense includes movement of funds from GF to Facilities. Net effect on fund balance is -$85,000. 9 Expense includes movement of funds from GF to Equipment Rental. Net effect on fund balance is -$78,000. 10 Increase electronic home monitoring expense ($55,000), increase personnel costs in F117 ($52,500), insurance reimbursement and expense for traffic signal repair ($44,400), golf clubhouse door ($35,100), increase fire pension expense ($35,000), golf pro shop inventory ($30,000), parks fence insurance claims and repair ($14,340), Community Center insurance claim ($6,667) Page 64 of 97 The following tables summarize the current and revised budget as a result of this amendment. Table 1: 2025 Budget as Amended 2025 Amended Budget $ 616,906,877 Budget Amendment #3 (Ord #7000) 27,343,247 Budget as Amended $ 644,250,124 Table 2: 2026 Budget as Amended 2026 Amended Budget $ 450,954,306 Budget Amendment #3 (Ord #7000) 3,062,608 Budget as Amended $ 454,016,914 Attachments: ❖ 1. Proposed Ordinance #7000 (budget adjustment #3) ❖ 2. Summary of proposed 2025 budget adjustments by fund and department (Schedule A) ❖ 3. Summary of proposed changes to the amended 2025 budget by fund (Schedule B) ❖ 4. Summary of proposed 2026 budget adjustments by fund and department (Schedule C) ❖ 5. Summary of proposed changes to the amended 2026 budget by fund (Schedule D) Page 65 of 97 Schedule A Summary of 2025 Budget Adjustments by Fund Budget Amendment #3 (Ordinance #7000) Beg. Fund Balance Revenues Expenditures Ending Fund Balance General Fund (#001) 2025 Adopted Budget 38,910,092 103,396,310 109,147,872 33,158,530 Previous Budget Amendments 22,033,911 2,863,362 10,940,372 13,956,901 2025 Amended Budget 60,944,003 106,259,672 120,088,244 47,115,431 BA#3 (Ordinance #7000, Proposed):- 2,785,478 16,856,247 (14,070,769) Parks, Arts & Rec Furnace Replacement – Golf Course - - 85,000 (85,000) Police Increase POL.0039 Vehicle Exp.- - 78,000 (78,000) Equip. Rental CF Reimbursement - - 607,669 (607,669) Human Resources 2025-26 OPD SPAR Grant gr2506 - 60,000 60,000 - Police PD2506/PD2408 HVE Grant - 21,886 21,886 - PD2504 2025-26 RSO Grant - 14,725 14,725 - pd2507 Alt Response Team Grant - 100,000 100,000 - Public Works MS2502 8th/R St Signl Rpr/Cnst - 44,400 44,400 - Parks, Arts & Rec PAARTS 4Culture 2025 Equip Grt - 13,460 13,460 - CP2516 Centennial Viewpoint Art - - - - Parks Fence Insurance Claims - 14,340 14,340 - Pro Shop Inventory for Q4-2025 - 30,000 30,000 - Irrigation budget increase - - 200,000 (200,000) Community Rm Floor Insur Claim - 6,667 6,667 - MS2120 Golf Clubhouse Doors - - 35,100 (35,100) Non-Departmental General Fund Revenues Adjustments - 2,480,000 545,000 1,935,000 GF to Cumulative Reserve Xfer Request - - 15,000,000 (15,000,000) Revised 2025 Budget - Fund 001 60,944,003 109,045,150 136,944,491 33,044,662 Page 66 of 97 Schedule A Summary of 2025 Budget Adjustments by Fund Budget Amendment #3 (Ordinance #7000) Beg. Fund Balance Revenues Expenditures Ending Fund Balance General Transportation Fund (#102) 2025 Adopted Budget 5,721,099 16,841,954 17,394,289 5,168,764 Previous Budget Amendments 5,665,221 23,960,230 31,180,816 (1,555,365) 2025 Amended Budget 11,386,320 40,802,184 48,575,105 3,613,399 BA#3 (Ordinance #7000, Proposed):- 4,096,947 2,974,180 1,122,767 Adjust cp2321 Transfer Budget - - - - Xfer Non-TBD to F102 - 1,122,767 - 1,122,767 CP2509 Grnt Dwntwn Bike 2 Trnt - 1,924,000 1,924,000 - CP2515 KC Metro ILA 124th Imp - 1,056,680 1,056,680 - CP2424 Indirect Fed Grnt WSDOT - (6,500) (6,500) - Revised 2025 Budget - Fund 102 11,386,320 44,899,131 51,549,285 4,736,166 Arterial Street Preservation Fund (#105) 2025 Adopted Budget 1,798,224 2,144,000 2,186,000 1,756,224 Previous Budget Amendments 3,721,721 - 354,599 3,367,122 2025 Amended Budget 5,519,945 2,144,000 2,540,599 5,123,346 BA#3 (Ordinance #7000, Proposed):- - 1,122,767 (1,122,767) Xfer Non-TBD to F102 - - 1,122,767 (1,122,767) Revised 2025 Budget - Fund 105 5,519,945 2,144,000 3,663,366 4,000,579 Drug Forfeiture Fund (#117) 2025 Adopted Budget 802,203 251,300 399,233 654,270 Previous Budget Amendments 86,379 15,000 30,000 71,379 2025 Amended Budget 888,582 266,300 429,233 725,649 BA#3 (Ordinance #7000, Proposed):- - 77,500 (77,500) Increase to Drug Forfeiture Salaries & Benefits - - 52,500 (52,500) F117 – Undercover Vehicle Purchase - - 25,000 (25,000) Revised 2025 Budget - Fund 117 888,582 266,300 506,733 648,149 Page 67 of 97 Schedule A Summary of 2025 Budget Adjustments by Fund Budget Amendment #3 (Ordinance #7000) Beg. Fund Balance Revenues Expenditures Ending Fund Balance Cumulative Reserve Fund (#122) 2025 Adopted Budget 33,916,951 80,000 825,600 33,171,351 Previous Budget Amendments (482,315) - 5,696,544 (6,178,859) 2025 Amended Budget 33,434,636 80,000 6,522,144 26,992,492 BA#3 (Ordinance #7000, Proposed):- 15,000,000 1,700,000 13,300,000 GF to Cumulative Reserve Xfer Request - 15,000,000 - 15,000,000 GCBD20 Facilities Master Plan - - 1,700,000 (1,700,000) Revised 2025 Budget - Fund 122 33,434,636 15,080,000 8,222,144 40,292,492 Parks Construction Fund (#321) 2025 Adopted Budget 463,899 1,876,300 1,850,000 490,199 Previous Budget Amendments 287,545 1,940,645 2,151,914 76,276 2025 Amended Budget 751,444 3,816,945 4,001,914 566,475 BA#3 (Ordinance #7000, Proposed):- 430,000 530,000 (100,000) CP2507 Move Funds from CP1612 - 430,000 530,000 (100,000) Revised 2025 Budget - Fund 321 751,444 4,246,945 4,531,914 466,475 Page 68 of 97 Schedule A Summary of 2025 Budget Adjustments by Fund Budget Amendment #3 (Ordinance #7000) Beg. Fund Balance Revenues Expenditures Ending Fund Balance Capital Improvements Fund (#328) 2025 Adopted Budget 1,541,064 8,195,500 8,175,000 1,561,564 Previous Budget Amendments 22,569,620 21,904,595 40,949,894 3,524,321 2025 Amended Budget 24,110,684 30,100,095 49,124,894 5,085,885 BA#3 (Ordinance #7000, Proposed):- 3,333,013 1,131,782 2,201,231 CP2108 PSE Grnt City Hall HVAC - 226,239 - 226,239 Adjust cp2321 Transfer Budget - 550,000 550,000 - MS2210/GCBD05/CP2332 REET CORR - 274,992 - 274,992 CP2507 Move Funds from CP1612 - - - - CP2516 Centennial Viewpoint Art - 55,900 55,900 - GCBD20 Facilities Master Plan - 1,700,000 - 1,700,000 CP2414 Aub Ave Thtr-Comm Grant - 485,000 485,000 - CP2424 Indirect Fed Grnt WSDOT - 6,500 6,500 - CP2414 xfr funding from CP2406 - 34,382 34,382 - Revised 2025 Budget - Fund 328 24,110,684 33,433,108 50,256,676 7,287,116 Local Revitalization Fund (#330) 2025 Adopted Budget 16,333 1,001,000 1,000,000 17,333 Previous Budget Amendments 351,676 2,485,642 2,807,314 30,004 2025 Amended Budget 368,009 3,486,642 3,807,314 47,337 BA#3 (Ordinance #7000, Proposed):- (1,550,000) (1,550,000) - Adjust cp2321 Transfer Budget - (1,550,000) (1,550,000) - CP2414 xfr funding from CP2406 - - - - Revised 2025 Budget - Fund 330 368,009 1,936,642 2,257,314 47,337 Page 69 of 97 Schedule A Summary of 2025 Budget Adjustments by Fund Budget Amendment #3 (Ordinance #7000) Beg. Fund Balance Revenues Expenditures Ending Fund Balance Real Estate Excise Tax Fund (#331) 2025 Adopted Budget 5,689,062 1,840,000 2,130,100 5,398,962 Previous Budget Amendments (5,689,062) 17,977,654 6,746,600 5,541,992 2025 Amended Budget - 19,817,654 8,876,700 10,940,954 BA#3 (Ordinance #7000, Proposed):- - 674,992 (674,992) MS2210/GCBD05/CP2332 REET CORR - - 274,992 (274,992) CP2107 M&O Facility Imprv Ph 1 - - 400,000 (400,000) Revised 2025 Budget - Fund 331 - 19,817,654 9,551,692 10,265,962 Water Fund (#430) 2025 Adopted Budget 5,361,267 20,710,000 22,689,605 3,381,662 Previous Budget Amendments 16,342,581 3,342,721 14,650,851 5,034,451 2025 Amended Budget 21,703,848 24,052,721 37,340,456 8,416,113 BA#3 (Ordinance #7000, Proposed):- - 300,721 (300,721) DWL26020 Debt Service Pmts - - 249,882 (249,882) Equip. Rental CF Reimbursement - - 50,839 (50,839) Revised 2025 Budget - Fund 430 21,703,848 24,052,721 37,641,177 8,115,392 Sewer Fund (#431) 2025 Adopted Budget 18,781,324 10,745,000 14,800,684 14,725,640 Previous Budget Amendments 12,240,632 - 9,181,985 3,058,647 2025 Amended Budget 31,021,956 10,745,000 23,982,669 17,784,287 BA#3 (Ordinance #7000, Proposed):- - (400,000) 400,000 Decr. 2025 Excise Tax Expense - - (400,000) 400,000 Revised 2025 Budget - Fund 431 31,021,956 10,745,000 23,582,669 18,184,287 Page 70 of 97 Schedule A Summary of 2025 Budget Adjustments by Fund Budget Amendment #3 (Ordinance #7000) Beg. Fund Balance Revenues Expenditures Ending Fund Balance Solid Waste Fund (#434) 2025 Adopted Budget 1,883,449 32,522,700 32,056,678 2,349,471 Previous Budget Amendments (66,980) 37,457 37,457 (66,980) 2025 Amended Budget 1,816,469 32,560,157 32,094,135 2,282,491 BA#3 (Ordinance #7000, Proposed):- 95,765 445,765 (350,000) Incr. 2025 Utility Tax Expense - - 350,000 (350,000) LSWF25 Solid Waste Grant 25-27 - 95,765 95,765 - Revised 2025 Budget - Fund 434 1,816,469 32,655,922 32,539,900 1,932,491 Airport Fund (#435) 2025 Adopted Budget 1,692,950 2,319,760 2,602,859 1,409,851 Previous Budget Amendments 233,793 1,093,521 1,398,801 (71,487) 2025 Amended Budget 1,926,743 3,413,281 4,001,660 1,338,364 BA#3 (Ordinance #7000, Proposed):- 1,647,537 1,647,537 - CP2335 Airport AWOS FAA Grant - 1,647,537 1,647,537 - Revised 2025 Budget - Fund 435 1,926,743 5,060,818 5,649,197 1,338,364 Cemetery Fund (#436) 2025 Adopted Budget 1,534,792 1,634,300 2,073,075 1,096,017 Previous Budget Amendments 53,857 - 124,953 (71,096) 2025 Amended Budget 1,588,649 1,634,300 2,198,028 1,024,921 BA#3 (Ordinance #7000, Proposed):- 19,000 19,000 - Purchase New JD Gator HPX815E - 19,000 19,000 - Revised 2025 Budget - Fund 436 1,588,649 1,653,300 2,217,028 1,024,921 Page 71 of 97 Schedule A Summary of 2025 Budget Adjustments by Fund Budget Amendment #3 (Ordinance #7000) Beg. Fund Balance Revenues Expenditures Ending Fund Balance Workers' Comp Fund (#503) 2025 Adopted Budget 3,498,469 1,225,300 1,060,200 3,663,569 Previous Budget Amendments 391,010 410,000 500,000 301,010 2025 Amended Budget 3,889,479 1,635,300 1,560,200 3,964,579 BA#3 (Ordinance #7000, Proposed):- 220,000 420,000 (200,000) Increase to Medical & Time Loss Claims - 220,000 420,000 (200,000) Revised 2025 Budget - Fund 503 3,889,479 1,855,300 1,980,200 3,764,579 Facilities Fund (#505) 2025 Adopted Budget 398,481 4,821,500 4,821,241 398,740 Previous Budget Amendments (280,075) 215,000 316,000 (381,075) 2025 Amended Budget 118,406 5,036,500 5,137,241 17,665 BA#3 (Ordinance #7000, Proposed):- 85,000 85,000 - Furnace Replacement – Golf Course - 85,000 85,000 - Revised 2025 Budget - Fund 505 118,406 5,121,500 5,222,241 17,665 Equipment Rental Fund (#550) 2025 Adopted Budget 5,061,776 8,146,940 6,354,620 6,854,096 Previous Budget Amendments 3,008,895 2,795,978 5,659,660 145,213 2025 Amended Budget 8,070,671 10,942,918 12,014,280 6,999,309 BA#3 (Ordinance #7000, Proposed):- 1,180,507 1,320,768 (140,261) Increase POL.0039 Vehicle Exp.- 78,000 78,000 - Purchase New JD Gator HPX815E - 19,000 19,000 - F117 – Undercover Vehicle Purchase - 25,000 61,000 (36,000) Equip. Rental CF Reimbursement - 658,507 762,768 (104,261) CP2107 M&O Facility Imprv Ph 1 - 400,000 400,000 - Revised 2025 Budget - Fund 550 8,070,671 12,123,425 13,335,048 6,859,048 Page 72 of 97 Schedule A Summary of 2025 Budget Adjustments by Fund Budget Amendment #3 (Ordinance #7000) Beg. Fund Balance Revenues Expenditures Ending Fund Balance Fire Pension Fund (#611) 2025 Adopted Budget 1,837,188 167,900 207,840 1,797,248 Previous Budget Amendments 2,517 - - 2,517 2025 Amended Budget 1,839,705 167,900 207,840 1,799,765 BA#3 (Ordinance #7000, Proposed):- - 35,000 (35,000) Increase Fire Pension Salaries - - 35,000 (35,000) Revised 2025 Budget - Fund 611 1,839,705 167,900 242,840 1,764,765 Grand Total - All Funds 2025 Adopted Budget 159,056,171 273,573,960 291,103,958 141,526,173 Previous Budget Amendments 102,582,206 81,694,540 156,199,507 28,077,239 2025 Amended Budget 261,638,377 355,268,500 447,303,465 169,603,412 Total BA#3 (Ordinance #7000, Proposed):- 27,343,247 27,391,259 (48,012) Revised 2025 Budget 261,638,377 382,611,747 474,694,724 169,555,400 644,250,124 644,250,124 Page 73 of 97 Schedule B 2025 Ending Fund Balance/Working Capital by Fund Fund 2025 Amended Beginning Balance 2025 Amended Ending Balance BA#3 (ORD #7000) Revenues BA#3 (ORD #7000) Expenditures BA#3 (ORD #7000) Net Change in Fund Balance Revised Ending Balance General Fund (#001)60,944,003 47,115,431 2,785,478 16,856,247 (14,070,769) 33,044,662 General Transportation Fund (#102)11,386,320 3,613,399 4,096,947 2,974,180 1,122,767 4,736,166 Hotel/Motel Tax Fund (#104)470,231 321,681 - - - 321,681 Arterial Street Preservation Fund (#105)5,519,945 5,123,346 - 1,122,767 (1,122,767) 4,000,579 Drug Forfeiture Fund (#117)888,582 725,649 - 77,500 (77,500) 648,149 Recreation Trails Fund (#120)53,723 61,223 - - - 61,223 Cumulative Reserve Fund (#122)33,434,636 26,992,492 15,000,000 1,700,000 13,300,000 40,292,492 Mitigation Fees Fund (#124)16,082,277 4,262,088 - - - 4,262,088 2020 LTGO A&B Refunding Bonds Fund (#232)476,000 476,100 - - - 476,100 SCORE Debt Service Fund (#238)- - - - - - LID Guarantee Fund (#249)- - - - - - Golf/Cemetery 2016 Refunding Fund (#276)- - - - - - Parks Construction Fund (#321)751,444 566,475 430,000 530,000 (100,000) 466,475 Capital Improvements Fund (#328)24,110,684 5,085,885 3,333,013 1,131,782 2,201,231 7,287,116 Local Revitalization Fund (#330)368,009 47,337 (1,550,000) (1,550,000) - 47,337 Real Estate Excise Tax Fund (#331)- 10,940,954 - 674,992 (674,992) 10,265,962 Water Fund (#430)21,703,848 8,416,113 - 300,721 (300,721) 8,115,392 Sewer Fund (#431)31,021,956 17,784,287 - (400,000) 400,000 18,184,287 Storm Drainage Fund (#432)23,011,582 9,279,829 - - - 9,279,829 Sewer Metro Sub Fund (#433)4,879,211 4,918,211 - - - 4,918,211 Solid Waste Fund (#434)1,816,469 2,282,491 95,765 445,765 (350,000) 1,932,491 Airport Fund (#435)1,926,743 1,338,364 1,647,537 1,647,537 - 1,338,364 Cemetery Fund (#436)1,588,649 1,024,921 19,000 19,000 - 1,024,921 Insurance Fund (#501)1,313,034 1,150,034 - - - 1,150,034 Workers' Comp Fund (#503)3,889,479 3,964,579 220,000 420,000 (200,000) 3,764,579 Facilities Fund (#505)118,406 17,665 85,000 85,000 - 17,665 Innovation & Technology Fund (#518)3,432,201 2,665,215 - - - 2,665,215 Equipment Rental Fund (#550)8,070,671 6,999,309 1,180,507 1,320,768 (140,261) 6,859,048 Fire Pension Fund (#611)1,839,705 1,799,765 - 35,000 (35,000) 1,764,765 Cemetery Endowment Fund (#701)2,540,569 2,630,569 - - - 2,630,569 Page 74 of 97 Schedule C Summary of 2026 Budget Adjustments by Fund Budget Amendment #3 (Ordinance #7000) Beg. Fund Balance Revenues Expenditures Ending Fund Balance General Fund (#001) 2026 Adopted Budget 33,158,530 106,950,907 114,023,485 26,085,952 Previous Budget Amendments 13,956,901 374,633 603,800 13,727,734 2026 Amended Budget 47,115,431 107,325,540 114,627,285 39,813,686 BA#3 (Ordinance #7000, Proposed):(14,070,769) 2,800,000 1,803,700 (13,074,469) Non-Departmental Furnace Replacement – Golf Course (85,000) - - (85,000) Increase POL.0039 Vehicle Exp.(78,000) - - (78,000) Equip. Rental CF Reimbursement (607,669) - - (607,669) Parks, Arts & Rec Security Contract I/F Alloc.- - - - Irrigation budget increase (200,000) - - (200,000) MS2120 Golf Clubhouse Doors (35,100) - - (35,100) Non-Departmental City Wide – Annual HVAC Preventative Maintenance - - 68,700 (68,700) City Wide - Annual Generator Preventative Maintenance - - 8,000 (8,000) General Fund Revenues Adjustments 1,935,000 2,800,000 1,727,000 3,008,000 GF to Cumulative Reserve Xfer Request (15,000,000) - - (15,000,000) Revised 2026 Budget - Fund 001 33,044,662 110,125,540 116,430,985 26,739,217 General Transportation Fund (#102) 2026 Adopted Budget 5,168,764 10,602,973 9,162,300 6,609,437 Previous Budget Amendments (1,555,365) - - (1,555,365) 2026 Amended Budget 3,613,399 10,602,973 9,162,300 5,054,072 BA#3 (Ordinance #7000, Proposed):1,122,767 - - 1,122,767 Xfer Non-TBD to F102 1,122,767 - - 1,122,767 Revised 2026 Budget - Fund 102 4,736,166 10,602,973 9,162,300 6,176,839 Page 75 of 97 Schedule C Summary of 2026 Budget Adjustments by Fund Budget Amendment #3 (Ordinance #7000) Beg. Fund Balance Revenues Expenditures Ending Fund Balance Arterial Street Preservation Fund (#105) 2026 Adopted Budget 1,756,224 2,168,000 2,186,000 1,738,224 Previous Budget Amendments 3,367,122 - - 3,367,122 2026 Amended Budget 5,123,346 2,168,000 2,186,000 5,105,346 BA#3 (Ordinance #7000, Proposed):(1,122,767) - - (1,122,767) Xfer Non-TBD to F102 (1,122,767) - - (1,122,767) Revised 2026 Budget - Fund 105 4,000,579 2,168,000 2,186,000 3,982,579 Drug Forfeiture Fund (#117) 2026 Adopted Budget 654,270 263,700 408,486 509,484 Previous Budget Amendments 71,379 - - 71,379 2026 Amended Budget 725,649 263,700 408,486 580,863 BA#3 (Ordinance #7000, Proposed):(77,500) - - (77,500) Increase to Drug Forfeiture Salaries & Benefits (52,500) - - (52,500) F117 – Undercover Vehicle Purchase (25,000) - - (25,000) Revised 2026 Budget - Fund 117 648,149 263,700 408,486 503,363 Cumulative Reserve Fund (#122) 2026 Adopted Budget 33,171,351 80,000 825,600 32,425,751 Previous Budget Amendments (6,178,859) - - (6,178,859) 2026 Amended Budget 26,992,492 80,000 825,600 26,246,892 BA#3 (Ordinance #7000, Proposed):13,300,000 - - 13,300,000 GF to Cumulative Reserve Xfer Request 15,000,000 - - 15,000,000 GCBD20 Facilities Master Plan (1,700,000) - - (1,700,000) Revised 2026 Budget - Fund 122 40,292,492 80,000 825,600 39,546,892 Page 76 of 97 Schedule C Summary of 2026 Budget Adjustments by Fund Budget Amendment #3 (Ordinance #7000) Beg. Fund Balance Revenues Expenditures Ending Fund Balance Parks Construction Fund (#321) 2026 Adopted Budget 490,199 711,300 685,000 516,499 Previous Budget Amendments 76,276 - - 76,276 2026 Amended Budget 566,475 711,300 685,000 592,775 BA#3 (Ordinance #7000, Proposed):(100,000) 106,000 106,000 (100,000) CP2507 Move Funds from CP1612 (100,000) - - (100,000) gpbd02 Golf Facility Improvement Fee - 106,000 106,000 - Revised 2026 Budget - Fund 321 466,475 817,300 791,000 492,775 Capital Improvements Fund (#328) 2026 Adopted Budget 1,561,564 13,270,500 13,250,000 1,582,064 Previous Budget Amendments 3,524,321 - - 3,524,321 2026 Amended Budget 5,085,885 13,270,500 13,250,000 5,106,385 BA#3 (Ordinance #7000, Proposed):2,201,231 - - 2,201,231 CP2108 PSE Grnt City Hall HVAC 226,239 - - 226,239 MS2210/GCBD05/CP2332 REET CORR 274,992 - - 274,992 GCBD20 Facilities Master Plan 1,700,000 - - 1,700,000 Revised 2026 Budget - Fund 328 7,287,116 13,270,500 13,250,000 7,307,616 Real Estate Excise Tax Fund (#331) 2026 Adopted Budget 5,398,962 1,840,000 1,569,700 5,669,262 Previous Budget Amendments 5,541,992 - - 5,541,992 2026 Amended Budget 10,940,954 1,840,000 1,569,700 11,211,254 BA#3 (Ordinance #7000, Proposed):(674,992) - - (674,992) MS2210/GCBD05/CP2332 REET CORR (274,992) - - (274,992) CP2107 M&O Facility Imprv Ph 1 (400,000) - - (400,000) Revised 2026 Budget - Fund 331 10,265,962 1,840,000 1,569,700 10,536,262 Page 77 of 97 Schedule C Summary of 2026 Budget Adjustments by Fund Budget Amendment #3 (Ordinance #7000) Beg. Fund Balance Revenues Expenditures Ending Fund Balance Water Fund (#430) 2026 Adopted Budget 3,381,662 22,200,250 23,286,921 2,294,991 Previous Budget Amendments 5,034,451 - - 5,034,451 2026 Amended Budget 8,416,113 22,200,250 23,286,921 7,329,442 BA#3 (Ordinance #7000, Proposed):(300,721) - 287,275 (587,996) City Wide - Annual Generator Preventative Maintenance - - 6,900 (6,900) DWL26020 Debt Service Pmts (249,882) - 280,375 (530,257) Equip. Rental CF Reimbursement (50,839) - - (50,839) Revised 2026 Budget - Fund 430 8,115,392 22,200,250 23,574,196 6,741,446 Sewer Fund (#431) 2026 Adopted Budget 14,725,640 11,505,000 12,425,228 13,805,412 Previous Budget Amendments 3,058,647 - - 3,058,647 2026 Amended Budget 17,784,287 11,505,000 12,425,228 16,864,059 BA#3 (Ordinance #7000, Proposed):400,000 - 21,900 378,100 City Wide - Annual Generator Preventative Maintenance - - 21,900 (21,900) Decr. 2025 Excise Tax Expense 400,000 - - 400,000 Revised 2026 Budget - Fund 431 18,184,287 11,505,000 12,447,128 17,242,159 Storm Drainage Fund (#432) 2026 Adopted Budget 8,802,355 14,180,200 15,452,074 7,530,481 Previous Budget Amendments 477,474 - - 477,474 2026 Amended Budget 9,279,829 14,180,200 15,452,074 8,007,955 BA#3 (Ordinance #7000, Proposed):- - 3,200 (3,200) City Wide - Annual Generator Preventative Maintenance - - 3,200 (3,200) Revised 2026 Budget - Fund 432 9,279,829 14,180,200 15,455,274 8,004,755 Page 78 of 97 Schedule C Summary of 2026 Budget Adjustments by Fund Budget Amendment #3 (Ordinance #7000) Beg. Fund Balance Revenues Expenditures Ending Fund Balance Solid Waste Fund (#434) 2026 Adopted Budget 2,349,471 34,866,600 34,040,130 3,175,941 Previous Budget Amendments (66,980) - - (66,980) 2026 Amended Budget 2,282,491 34,866,600 34,040,130 3,108,961 BA#3 (Ordinance #7000, Proposed):(350,000) - - (350,000) Incr. 2025 Utility Tax Expense (350,000) - - (350,000) Revised 2026 Budget - Fund 434 1,932,491 34,866,600 34,040,130 2,758,961 Airport Fund (#435) 2026 Adopted Budget 1,409,851 2,512,400 2,973,025 949,226 Previous Budget Amendments (71,487) - - (71,487) 2026 Amended Budget 1,338,364 2,512,400 2,973,025 877,739 BA#3 (Ordinance #7000, Proposed):- - 700 (700) City Wide – Annual HVAC Preventative Maintenance - - 700 (700) Revised 2026 Budget - Fund 435 1,338,364 2,512,400 2,973,725 877,039 Cemetery Fund (#436) 2026 Adopted Budget 1,096,017 1,696,800 2,098,241 694,576 Previous Budget Amendments (71,096) - - (71,096) 2026 Amended Budget 1,024,921 1,696,800 2,098,241 623,480 BA#3 (Ordinance #7000, Proposed):- - 2,220 (2,220) City Wide – Annual HVAC Preventative Maintenance - - 600 (600) CEM Security Contract I/F Alloc - - 1,620 (1,620) Revised 2026 Budget - Fund 436 1,024,921 1,696,800 2,100,461 621,260 Page 79 of 97 Schedule C Summary of 2026 Budget Adjustments by Fund Budget Amendment #3 (Ordinance #7000) Beg. Fund Balance Revenues Expenditures Ending Fund Balance Workers' Comp Fund (#503) 2026 Adopted Budget 3,663,569 1,225,300 1,060,400 3,828,469 Previous Budget Amendments 301,010 - - 301,010 2026 Amended Budget 3,964,579 1,225,300 1,060,400 4,129,479 BA#3 (Ordinance #7000, Proposed):(200,000) - - (200,000) Increase to Medical & Time Loss Claims (200,000) - - (200,000) Revised 2026 Budget - Fund 503 3,764,579 1,225,300 1,060,400 3,929,479 Facilities Fund (#505) 2026 Adopted Budget 398,740 4,932,800 4,947,759 383,781 Previous Budget Amendments (381,075) - - (381,075) 2026 Amended Budget 17,665 4,932,800 4,947,759 2,706 BA#3 (Ordinance #7000, Proposed):- 204,620 204,620 - City Wide – Annual HVAC Preventative Maintenance - 70,000 70,000 - City Wide - Annual Generator Preventative Maintenance - 40,000 40,000 - CEM Security Contract I/F Alloc - 16,620 16,620 - Security Contract I/F Alloc.- 78,000 78,000 - Revised 2026 Budget - Fund 505 17,665 5,137,420 5,152,379 2,706 Equipment Rental Fund (#550) 2026 Adopted Budget 6,854,096 7,794,805 5,834,743 8,814,158 Previous Budget Amendments 145,213 - - 145,213 2026 Amended Budget 6,999,309 7,794,805 5,834,743 8,959,371 BA#3 (Ordinance #7000, Proposed):(140,261) - - (140,261) F117 – Undercover Vehicle Purchase (36,000) - - (36,000) Equip. Rental CF Reimbursement (104,261) - - (104,261) Revised 2026 Budget - Fund 550 6,859,048 7,794,805 5,834,743 8,819,110 Page 80 of 97 Schedule C Summary of 2026 Budget Adjustments by Fund Budget Amendment #3 (Ordinance #7000) Beg. Fund Balance Revenues Expenditures Ending Fund Balance Fire Pension Fund (#611) 2026 Adopted Budget 1,797,248 176,500 207,840 1,765,908 Previous Budget Amendments 2,517 - - 2,517 2026 Amended Budget 1,799,765 176,500 207,840 1,768,425 BA#3 (Ordinance #7000, Proposed):(35,000) - - (35,000) Increase Fire Pension Salaries (35,000) - - (35,000) Revised 2026 Budget - Fund 611 1,764,765 176,500 207,840 1,733,425 Grand Total - All Funds 2026 Adopted Budget 141,526,173 280,938,953 289,766,103 132,699,023 Previous Budget Amendments 28,077,239 411,941 641,108 27,848,072 2026 Amended Budget 169,603,412 281,350,894 290,407,211 160,547,095 Total BA#3 (Ordinance #7000, Proposed):(48,012) 3,110,620 2,429,615 632,993 Revised 2026 Budget 169,555,400 284,461,514 292,836,826 161,180,088 454,016,914 454,016,914 Page 81 of 97 Schedule D 2026 Ending Fund Balance/Working Capital by Fund Fund 2026 Amended Beginning Balance 2026 Amended Ending Balance BA#3 (ORD #7000) Revenues BA#3 (ORD #7000) Expenditures BA#3 (ORD #7000) Net Change in Fund Balance Revised Ending Balance General Fund (#001)47,115,431 39,813,686 (11,270,769) 1,803,700 (13,074,469) 26,739,217 General Transportation Fund (#102)3,613,399 5,054,072 1,122,767 - 1,122,767 6,176,839 Hotel/Motel Tax Fund (#104)321,681 323,081 - - - 323,081 Arterial Street Preservation Fund (#105)5,123,346 5,105,346 (1,122,767) - (1,122,767) 3,982,579 Drug Forfeiture Fund (#117)725,649 580,863 (77,500) - (77,500) 503,363 Recreation Trails Fund (#120)61,223 68,723 - - - 68,723 Cumulative Reserve Fund (#122)26,992,492 26,246,892 13,300,000 - 13,300,000 39,546,892 Mitigation Fees Fund (#124)4,262,088 2,704,615 - - - 2,704,615 2020 LTGO A&B Refunding Bonds Fund (#232)476,100 476,200 - - - 476,200 Parks Construction Fund (#321)566,475 592,775 6,000 106,000 (100,000) 492,775 Capital Improvements Fund (#328)5,085,885 5,106,385 2,201,231 - 2,201,231 7,307,616 Local Revitalization Fund (#330)47,337 48,337 - - - 48,337 Real Estate Excise Tax Fund (#331)10,940,954 11,211,254 (674,992) - (674,992) 10,536,262 Water Fund (#430)8,416,113 7,329,442 (300,721) 287,275 (587,996) 6,741,446 Sewer Fund (#431)17,784,287 16,864,059 400,000 21,900 378,100 17,242,159 Storm Drainage Fund (#432)9,279,829 8,007,955 - 3,200 (3,200) 8,004,755 Sewer Metro Sub Fund (#433)4,918,211 4,961,211 - - - 4,961,211 Solid Waste Fund (#434)2,282,491 3,108,961 (350,000) - (350,000) 2,758,961 Airport Fund (#435)1,338,364 877,739 - 700 (700) 877,039 Cemetery Fund (#436)1,024,921 623,480 - 2,220 (2,220) 621,260 Insurance Fund (#501)1,150,034 987,534 - - - 987,534 Workers' Comp Fund (#503)3,964,579 4,129,479 (200,000) - (200,000) 3,929,479 Facilities Fund (#505)17,665 2,706 204,620 204,620 - 2,706 Innovation & Technology Fund (#518)2,665,215 2,873,935 - - - 2,873,935 Equipment Rental Fund (#550)6,999,309 8,959,371 (140,261) - (140,261) 8,819,110 Fire Pension Fund (#611)1,799,765 1,768,425 (35,000) - (35,000) 1,733,425 Cemetery Endowment Fund (#701)2,630,569 2,720,569 - - - 2,720,569 Page 82 of 97 2025/2026 Mid-Biennial Budget Review Major General Fund Revenue Sources, 2026 Property Tax Levy (Ord.7003), and Mid-Biennial Budget Amendment (Ord. 7008) CITY COUNCIL STUDY SESSION NOVEMBER 10, 2025 Page 83 of 97 Upcoming Calendar and Council Action Date Meeting Action Topic 10/27/2025 Study Session Presentation Utility Rate Study – Presentation 1 11/10/2025 Study Session Presentation Utility Rate Study – Presentation 2 11/10/2025 Study Session Presentation .1% public safety sales tax 11/10/2025 Study Session Presentation 2026 Property Tax Levy 11/10/2025 Study Session Presentation Mid-Biennial Budget Review 11/17/2025 Council Meeting Public Hearing Mid-Biennial Budget Review 11/17/2025 Council Meeting Public Hearing 2026 Property Tax 11/17/2025 Council Meeting Adoption Mid-Biennial Budget Amendment 11/18/2025 Council Meeting Adoption 2026 Property Tax Levy 11/17/2025 Council Meeting Adoption Utility Rate Study 11/17/2025 Council Meeting Adoption .1% public safety sales tax Page 84 of 97 Mid-Biennial Budget Amendment Ordinance 7000 accounts for three types of General Fund adjustments: 1. Review major revenue sources ◦2025 and 2026 revenue realignment and cumulative reserve fund transfers ◦2026 Property Tax Levy (ord. 7003) ◦Net impact on fund balance: -$11.72 million 2. Regular budget amendment for operational needs ◦Net Impact on fund balance: -$3.4 million 3. Add revenue impacts of .1% Public Safety Sales Tax ◦Net impact on fund balance: $2 million Estimated 2026 Ending Fund Balance: $26.7 million (23% of annual operating expenditures) Ordinance 7000 accounts for two types of adjustments to all other funds: 1. Regular budget amendments for operational needs ◦Net impact on fund balances: -$1 million 2. Capital project adjustments ◦Net impact on fund balances: -$274k Estimated 2026 Ending Fund Balance for all other funds: $134.4 million Page 85 of 97 Review Major Revenue Sources Total: $213.6 million Total: $217.2 million Page 86 of 97 2026 Preliminary Property Tax Levy Ordinance 7003 sets the 2026 Property Tax Levy at $25,843,584 2026 Preliminary Assessed Valuation 19,633,917,579$ 2025 Property Tax Levy 25,587,707$ Add: 1%255,877 Add: New Construction (at prior year levy rate)176,247 Add: Refunds 125,519 2026 Property Tax Levy 26,145,350$ 2026 Estimated Levy Rate 1.33168$ 2025 Actual Levy Rate 1.31632$ Page 87 of 97 Mid-Biennial Budget Amendment – 1. General Fund Revenue Realignment Property tax in alignment with our current trend of 99% collection rates Utility taxes are trending greater based on increased revenue base = greater tax collection B&O Tax collections exceeds budget based on collection and audit efforts of past due and delinquent accounts MIT Compact funding has begun decreasing and we have been warned this trend will continue Transfer $15 million into the Cumulative Reserve Fund Mid-Biennial Revenue Realignment Revenue Expenditure Revenue Expenditure Property Tax 300,000$ - 700,000$ - Utility Taxes - Solid Waste 400,000$ - 400,000$ - Utility Taxes - Electric Utility 200,000$ - - - B&O Tax 1,700,000$ - - - MIT Compact (120,000)$ - (300,000) - Total Revenue Adjustments 2,480,000$ -$ 800,000$ -$ 2025 2026 Page 88 of 97 Mid-Biennial Budget Amendment – 1. General Fund Revenue Realignment Cumulative Reserve Fund Target balance 11-31% of General Fund expenditures ($12.6 million - $35.5 million) Current balance is $33.4 million with $9.6 million currently committed by Council action Funds can be used for economic downturn/stabilization, capital/1x programs, catastrophic events 2020 Actual 2021 Actual 2022 Actual 2023 Actual 2024 Actual 2025 Budgeted 2026 Budgeted 2027 Forecast 2028 Forecast 2029 Forecast 2030 Forecast Ending Fund Balance 30,688,514$ 35,357,368$ 25,688,906$ 46,010,987$ 60,944,003$ 47,115,431$ 39,813,686$ 32,861,142$ 20,267,242$ 2,259,963$ (15,324,904)$ % of Expenditures 42.0%43.7%25.2%49.3%61.2%39.2%34.7%27.4%16.3%1.8%-11.4% Page 89 of 97 Mid-Biennial Budget Amendment – 2. General Fund Operating Adjustment General Fund Operational Admendments Revenue Expenditure Revenue Expenditure Furnace Replacement - Golf Course -$ 85,000$ -$ -$ Cluhouse Doors - Golf Course - 35,100 - - Pro Shop Inventory 30,000 30,000 - - Parks Irrigation - 200,000 - - 4Culture Grant (Parks)13,460 13,460 - - Police Take Home Vehicles - 685,669 - - SPAR Grant 60,000 60,000 - - HVE Grant (PD)21,886 21,886 - - RSO Grant (PD)14,725 14,725 - - Alt Response Team Grant (PD)100,000 100,000 - - 8th/R Signal Repairs Insurance Claim 44,400 44,400 - - Park Fences Insurance Claim 14,340 14,340 - - Community Room Floor Insurance Claim 6,667 6,667 - - SCORE - 165,000 - 1,150,000 Electronic Home Monitoring - 55,000 - 27,000 Public Defense Contracts - 325,000 - 550,000 Preventative Maintenance (to Facilities)- - - 76,700 Total Budget Amendment Requests 305,478$ 1,856,247$ -$ 1,803,700$ 2025 2026 Net impact to 2026 Ending Fund Balance: -$3.4 million Page 90 of 97 Mid-Biennial Budget Amendment – 3. .1% Public Safety Sales Tax (ord. 7008) If Ord. 7008 is adopted: Add $2,000,000 in sales tax revenue in 2026 ◦This additional revenue to soften the impacts increasing public safety costs in 2026: SCORE jail and public defense contracts ◦These increase costs already need to be accounted for in the regular budget amendment Future uses for consideration: ◦Estimated revenue impacts in the future 2027/2028 biennial budget = $2.7 million annually ◦Potential increases to SCORE: $500,000 ◦New PD Technology needs: $575,000 ◦Potential Public Defense Contracts: $175,000 ◦Additional Debt Service for new public safety building: $1.4 million Page 91 of 97 Mid-Biennial Budget Amendment – All Other Funds – Operating Adjustments Net impact to 2026 Ending Fund Balance: -$1 million Operational Adjustments Fund Revenue Expenditure Revenue Expenditure Drug Forfeiture Adjustments Drug Forfeiture/ERR -$ 113,500$ -$ -$ DWSRF Loan Water - 249,882 - 280,375 Equipment Replacement Charge Water - 50,839 - - Excise Tax Correction Sewer - (400,000) - - Annual Generator Maintenance (to Facilities)Water/Sewer/Storm - - - 34,920 Utility Tax Solid Waste - 350,000 - - Dept of Ecology Grant Solid Waste 95,765 95,765 - - FAA Grant Airport 1,647,537 1,647,537 - - John Deere Gator Cemetery 19,000 19,000 - - Time Loss Claim Adjustments Workers Comp 220,000 420,000 - - Equipment Replacment Carry Forward Equipment Replacement - 104,261 - - Fire Pension Salaries Fire Pension - 35,000 - - Total Operational Adjustments 1,982,302$ 2,685,784$ -$ 315,295$ 2025 2026 Page 92 of 97 Mid-Biennial Budget Amendment – All Other Funds – Capital Adjustments Capital Projects Fund Revenue Expenditure Revenue Expenditure Downtown Bike Grant General Transportation 1,924,000$ 1,924,000$ -$ -$ KC Metro ILA 124th Improvements General Transportation 1,056,680 1,056,680 - - Drug Forfeiture Adjustments Drug Forfeiture/ERR - 113,500 - - Combine Postmark Alley and New Park Projects Parks Construction - 100,000 - - Golf Facility Improvement Fee Parks Construction - - 106,000 106,000 PSE Grant Capital Improvement Fund 226,239 - - - Auburn Ave. Theater Grant Capital Improvement Fund 485,000 485,000 - - M&O Facilty Improvements Phase 1 REET - 400,000 - - Total Capital Projects 3,691,919$ 4,079,180$ 106,000$ 106,000$ 2025 2026 Net impact to 2026 Ending Fund Balance: -$274k Page 93 of 97 Next Steps: 11/17/25 ◦Public Hearing on Mid-Biennial Budget Review ◦Public Hearing on 2026 Property Tax Levy 11/17/2025 ◦Adopt Mid-Biennial Budget Amendment (Ord. 7000) ◦Adopt 2026 Property Tax Levy (Ord. 7003) ◦Adopt Utility Rate Study (Ord. 7004) ◦Adopt .1% Public Safety Sales Tax (Ord. 7008) Page 94 of 97 AGENDA BILL APPROVAL FORM Agenda Subject: Meeting Date: Ordinance No. 7003 (Thomas) (10 Minutes) An Ordinance establishing the levy for regular Property Taxes by the City of Auburn for collection in 2026 for general City operational purposes in the amount of $25,843,584 November 10, 2025 Department: Attachments: Budget Impact: Finance Ordinance No. 7003 Administrative Recommendation: For discussion only. Background for Motion: Background Summary: Proposed Ordinance No. 7003 establishes the 2026 Property Tax levy based on the assessed valuations provided by King County plus a 1% increase over 2025, which totals $26,843,584. Additionally, the city will levy one-time increases due to new construction from prior years and refunds, which are estimated to total $301,766. The following table summarizes the 2026 Property Tax Levy calculation. 2025 Property Tax Levy $25,587,707 Add: 1% 255,877 Add: New Construction (at prior year levy rate) 176,247 Add: Refunds 125,519 2026 Property Tax Levy $26,145,350 As of this date, the County has preliminarily established the 2026 assessed valuation (including estimated new construction) for the City of Auburn at $19.6 billion, which is a 2.44% increase over the 2025 assessed value of $19.2 billion. The 2026 Property Tax Levy will be distributed to the General Fund to support general governmental operations. Councilmember: Kate Baldwin Staff: Jamie Thomas Page 95 of 97 -------------------------------- Ordinance No. 7003 November 6, 2025 Page 1 of 2 ORDINANCE NO. 7003 AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF AUBURN, WASHINGTON, ESTABLISHING THE LEVY FOR REGULAR PROPERTY TAXES BY THE CITY OF AUBURN FOR COLLECTION IN 2026 FOR GENERAL CITY OPERATIONAL PURPOSES IN THE AMOUNT OF $25,843,584 WHEREAS, the City Council of the City of Auburn has met and considered its budget for the calendar year 2026; and WHEREAS, pursuant to RCW 84.55.120 the City Council held Public Hearings on November 17, 2025, after proper notice was given, to consider the City of Auburn's 2025-2026 mid-biennial budget review and the regular property tax levy; and WHEREAS, the City Council of the City of Auburn, after Public Hearing, and after duly considering all relevant evidence and testimony presented, has determined that the City of Auburn requires property tax revenue and any increase of new construction and improvements to property, any increase in the value of state-assessed property, annexations, and any refund levies in order to discharge the expected expenses and obligations of the City and in its best interest; and NOW THEREFORE, THE CITY COUNCIL OF THE CITY OF AUBURN, WASHINGTON, DO ORDAIN AS FOLLOWS: Section 1. Regular property taxes for collection in the City of Auburn for the year 2026 are authorized in the amount of $25,843,584. Not including the addition of new construction and improvements to property, any increases related Page 96 of 97 -------------------------------- Ordinance No. 7003 November 6, 2025 Page 2 of 2 to the value of state assessed property, and any refund levies available. The regular property tax levy for 2026 collection represents an increase of $255,877, or 1%, from regular property taxes levied for collection in 2025. Section 2. Implementation. The Mayor is hereby authorized to implement those administrative procedures necessary to carry out the directions of this legislation. Section 3. Severability. The provisions of this ordinance are declared to be separate and severable. The invalidity of any clause, sentence, paragraph, subdivision, section or portion of this ordinance, or the invalidity of the application of it to any person or circumstance will not affect the validity of the remainder of this ordinance, or the validity of its application to other persons or circumstances. Section 4. Effective date. This Ordinance will take effect and be in force five days from and after its passage, approval and publication as provided by law. INTRODUCED: _______________ PASSED: ____________________ APPROVED: _________________ ____________________________ NANCY BACKUS, MAYOR ATTEST: ____________________________ Shawn Campbell, MMC, City Clerk APPROVED AS TO FORM: ____________________________ Jason Whalen, City Attorney Published: _____________________________________________________________ Page 97 of 97