City Council - Regular Meeting

Recording in progress.

Okay. Good morning. Welcome to the Thurston County Board of County Commissioners board work session for Wednesday, 04/29/2026. It's 09:04AM. My name is Ty Mentzer, chair of the board. To my left vice chair, commissioner Wayne Forner, commissioner Emily Claus, commissioner Carolina Mihiel, commissioner Rachel Grant on Zoom, county manager Leonard Hernandez, assistant county managers Jennifer Walker, and Josh Cummings. The meeting is being livestreamed at the YouTube channel, and written public comment may be received up to two hours in advance. The meeting and distributed to the board action may be taken at this meeting. The first item up is permit review process, annual update, land use appeals.

Board is our team is getting set up. This was a request from the board to have this relooked at several months back. And so we made a commitment to bring this back. We appreciate commissioners flagging the time frame. So have our CPET team, which will allow them to introduce themselves, to engage with all of you in this conversation.

Yeah. So as you arrive, CPET director, good morning, commissioners. And I am joined today by Andrew Vaughan, our community development manager, as well as Andrea Rodriguez, our associate long range planner for land use matters. And happy to return just a week after docket with the same team. As county manager Leonard Fernandez highlighted, this is a follow-up discussion. So there were a number of work sessions held on it last year.

We'll try to provide a little high level refresher. And then this is

really an opportunity for you all to talk through this proposal and decide on whether there's any final action you'd

like to take.

So this was originally included in our 2025 permit review process annual update, which was voted on last year. This piece was pulled out in November following both a work session in September and November to allow for just further discussion amongst the commissioners with a request to return in the 2026. So why are we even looking at this? Right now, written into our code for almost all of our land use applications, the board is currently the final decision maker for quasi judicial land use permits. And that means that you hear appeals on projects like special use permits, variances, reasonable use exceptions, land divisions.

You're even the appeals body for administrative decisions that have gone to the hearings examiner and then go to you. Once you the body, hear an appeal, make a decision on it, it can then be appealed to a superior court. In lieu of you being the body that hears appeals, you can also authorize the hearing examiner to be the final decision maker on those same permits with appeals not going through you to Superior Court but going straight to Superior Court. And that is how most other jurisdictions, at least in our region, have set up their codes. The board requested the item to be added to the docket in August 2023.

So this has definitely been a recurring discussion item with an interest in having a broader community discussion. Was oh, I think there were four work sessions with the Planning Commission on this as well as two work sessions with the board. So there definitely has been that broad community discussion. The Planning Commission had recommended to retain the board with a 10 to zero vote. And then, of course, it came to the board.

Considerations just to think about that I know have come up in prior discussions are financial risk to the county and having the board be the appeals body on these kinds of land use applications. Because as you recall, you're only looking at the body of evidence or body of findings that's already in the record. So not necessarily new information. They're fairly legal decisions. There's also considerations of staff resource allocation.

As you're pretty familiar, we've got one appeal already in 2026. And you heard four appeals in 2025. And what that does in terms of resource allocations, you've got our team working on it. You have the PAO's office working on it. And then, of course, you have all of yourselves working on it. And then it also limits any ex parte discussions that you have. So in terms of being able to hear from your constituents and the broader community on these land use applications, you really have to limit that. Otherwise, you have to recuse yourself from hearing those appeals. I know sometimes that can be challenging because you're not even controlling the emails that you get from the various community members and organizations.

Can I add a piece to that? So one of the things we heard the members of the public that didn't wanna see this change was that they the hearing examiner applies codes, and then they argued that the board of county commissioners would apply a different, set of standards and lenses, a more political community driven lens. But then if that decision wasn't acceptable to the other party, it goes to peer court where they go back and do what the hearings ever did, which is apply the legal code. So my problem with that is twofold. One is prosecuting attorney's office told us that it's absolutely not the case.

The commissioners must apply the legal codes. No community political considerations. That's not our role. So we were told that's not our job. So right there, if that's you know, there's a disconnect between what people think they're getting out of this process and what they are getting or or should be getting.

If the people were right, those commenters were right, then it's a really poor process when any lawyer will tell you that if every level of review is applying a different set of standards and criteria, that's just that's bad process because then the person's like, well, the person that didn't win at the first level goes, well, maybe I and then I win at the second level. And the person who doesn't win second level goes, well, wanted I the first level so I'm probably gonna wait at the third level because it's back to same criteria. That just creates expense and complication and stretches out a process. So either way, there's a major problem with this. One is people don't understand what the process is and what they're going to get out of it.

Or the other side of it is you have a terribly deeply flawed process. So I just want to add that to the consideration bullets because that came out clearly in public comment. And it made me feel very uncomfortable when I'm in sessions with prosecuting attorneys telling us this is what you need to do. And I'm listening to community members who I respect and understand what they're saying saying, no, this is what you need to do. And it's like, I'm caught in a crossfire. I can't do both of those things appropriately. So I just want to highlight that because that's where I get really nervous about all this.

And I think that that is why most of the jurisdictions have shifted to removing the legislative body from the appeals process. And that is the recommendation of MRSC, given the fact that it isn't intended to be a political decision. You do have to apply the codes that are currently on the record.

We're pretty well equipped to do that in my opinion.

There was one public comment that really made me step back and rethink all of this. It was one regarding the way that the board handled was the Maytown scenario. And the public commenter said that we ended up getting sued. But we upheld publicly certain demographics' wishes. And we ended up getting sued, and it doesn't matter because the insurance company pays for it. And that's not true. We end up paying in the end and everybody ends up paying in the end when you aren't following the rules. And just because you can get away with breaking the rules and shoving those costs onto the rest of the state, I just I didn't land well. Don't think it would be.

So it is important to look at a comparison of process because it would be different. To some extent, it would be maybe less costly and more time efficient to go straight to Superior Court. And in other instances, it wouldn't. So we just want to be really transparent here. So our current process, you do have to submit the appeal within fourteen days of the hearing examiner decision.

There is a fee of around $1,200 And legal representation is not required. If you shift to superior court process, it would be within thirty days of the decision. So there is more time to prepare those appeals. It's probably a positive, especially if it's an organization that wants to submit an appeal. It's a lower filing fee. But if you are thinking about organizations appealing, there is legal representation requirements. So that is the big difference. So lower cost of entry, but a requirement to hire or get a lawyer to represent you in

that court.

I'm sorry.

Can you go back But real

not for individuals?

Not for individuals. It only applies to nonprofit groups and organizations, which we do see appeals from.

Thank you.

And so just a quick recap on the summary of changes. Does get appeals are spread all throughout our code. Things are not consolidated into one section. And so the package itself does include changes to all the titles listed up there. And it changes the final appeal body from the board of county commissioners to the hearings examiner.

There was a narrow scope of updates between November and this April based on some appeals that came in or were attempted to be submitted. And so in working through legal counsel, we realized that appeals in Title 24 this is our I'm sorry, Title 14, it's our building code. Appeals in Title 14, which we've never actually done, go to, in some cases, a nine person body, which we don't even have formed that. And so legal counsel's recommendation was those appeals go to the hearing examiner and then on to superior court. So that was just more of a, oh, we've never had an appeal in Title 14.

And this is really clunky to maintain a nine person body made up of building professionals, by the way, that would have to be recruited. So that was a clarification that we worked on legal counsel with. And then we also received both feedback from our hearings examiner as well as legal counsel on appeal specifically for wireless communication facilities, so clarifying that. And at this point, this is really open for the board's discussion and whether you want to have any kind of follow-up work sessions, have additional questions, or want to take a final action on this item.

So Commissioner Mihael, go ahead.

Thank you. If the board were to take action, kind of, when would this take effect? Like, who would it, like, guess in terms of hearings in front, of the hearings examiner. Right? Like, is there, like, a cutoff date? Like, how would this be implemented?

Effective immediately.

Yeah. So effective immediately upon adoption. Any You want invest

in the old process or anything like that because their appeal's already gone?

No. So for the one appeal we've already received for this year, that would come before the board. So obviously, ones that are in process, but any new appeals would go to Superior Court.

But aren't there more than just one?

I think we only have

one active one for the board right now. We have other ones going to the hearing examiner.

But that's not

The pipeline would shift.

The pipeline shifts, yeah.

I have questions about that too. I have just one comment and then a couple of questions. I guess one of them was just covered by two. My comment was just that when we did this in what was it? December, we were debating it. It felt like there were probably three votes to move it forward. There's a significant change, which I understand. And so I was in the planning commission. I didn't actually get what I thought was a full presentation of what the pros and cons were. So I actually requested to delay the vote to see if because there were questions by commissioners.

I think Claus and Grant were still not supportive necessarily or on the fence. And one of the things that was brought up was the argument of, well, how does the board go about understanding what changes to the code might be good if we're not going through piece by piece the different appeals? And I said at that time that the hearing examiner often produces a memo on that very question because she sees a much broader array than we're ever going to see an appeal. And I just was hoping that my colleagues on April 6, we got that memo. So it's an example of what I was talking about.

And it addresses that question of how you would go about doing that work without having to be the actual quadratic judicial body. So I wanted to just point that out. And then my other question is about the process. I'm not seeing it on this slide, but I felt like somewhere I saw something about a suggestion of another public hearing. I guess I was wondering why would we be doing that if we are Okay. Nope. I'm crisscrossing two different issues then.

I think we've already had two public hearings on this.

And it's really just at the point where if the board wants

to That's what I thought because we just delayed the vote. That could have happened in December. So I guess I just was misreading something else. Other questions from board members, comments?

I have a question. Yeah. So in the are we considering taking action today, or are we following what the agenda says about next steps? It sounds like we may or may not need another work session, but that's in the agenda packet that says we'll have follow-up work sessions. I don't know if there are any planned, and then board action.

I think that's just if the board wanted to, as Ashley said. We're not recommending for the work sessions unless the board would like to discuss this more. Think that two times the board has discussed it, and I really appreciate staff coming prepared with a presentation. It's really what the board's direction as to where they want to go. I think the staff have prepared just for action today with including the information. So if you want

to give staff take a motion, the board can do that. Does it go on agenda? Yeah.

It would be we'd bring it for at a board meeting. So if we

get a motion So direction to move it toward

adoption at a point. Commissioner here.

Oh, is commissioner cost done with her questions?

Alright. Keep going, commissioner.

Let's see. Well, I'm thank you, commissioner here. The only other thing I wanna say on that, point is just that, I think having I appreciate staff for coming forward with this information and the follow-up work sessions and being able to answer questions. I do think because the public facing documents state that this is an informational briefing and that there will be board action in May, I would be reluctant to take action today, whether even through a motion. Because staff can add this to the agenda without a motion in the room today. Is that right?

Yeah. I think we would need direction if the board wants us to prep it. This is going have to come at a business meeting.

Okay.

Yeah. So we wouldn't you wouldn't be accomplishing the final action today. We would be prepping it for a process that would be required for it to go through the business meeting. We need direction to do that.

Do we want staff spending the time to prep it for our decision? It's like, I guess, the question before us today.

Okay. But we have to finalize the ordinance, get the PEO signature, and prepare all the AIS documentation.

If there's not an interest of the majority of board to do that, then there's no sense in having staff do that.

Mr. Miyah?

Thank you. I guess kind of where I'm at, I would like to kind of move forward with staff prepping kind of the ordinance and and getting that process started. But I would like, you know, just kind of in terms terms of letting the public know, for cases that are going through the hearings examiner for the month of April, kind of letting those cases know and and kinda giving them that, I guess, not I wouldn't say, like, benefit, but, like, that kind of walk like, walk through. And then maybe starting with the cases in May for the that are scheduled in front of the hearings examiner. Just so there's kind of a a little bit more of a not a process upheaval for for people who are maybe were, kind of wanting to appeal in front of the board.

So just

That that that makes sense. We'll let our parent examiners know that the way the effectiveness will work is when they make any decisions following the board's action, the appeal language in that decision will identify Superior Court as the appropriate appeals body.

And to Commissioner Maria's point, what about a communication to those that are already in the pipeline?

We can absolutely do that. We can also include that within our standard PowerPoint that we now provide to the hearing examiner. It's just kind of that follow-up at the end.

Commissioner Maria, does that work?

Yes. Thank you. It's just because I think some of these cases that have been going through April, right, like those haven't been able to talk to us because we've been kind of through that old process because they might be come in front of the board. And then, you know, if we kind of just switch it up now and and now they can talk to it, it just I think, it would just create a little bit of confusion. So I think just just to kinda give everyone, I think,

that that walkthrough, I I would appreciate that.

Yeah. We're happy to clarify. Last thing we want is folks to be confused as to where what process, and this is a significant change the board is considering.

I have no concerns about timing of it. I just want to, like, land on a better process. And if it means, you know, delayed implementation for six months or after the ones that have already been filed, whatever. I figured prosecuting attorney might have mandate for us on that. I wasn't sure, you know, if we have that latitude. But if we have latitude, we should just make it as clear and transparent as can.

Yeah. Mean, I think it makes sense for the decisions that are being issued. So anything that is being

Hasn't been

filed Yeah. And anything that's coming out in April and the appeal deadline extends into when you may take action, we should honor those as being in the board's pipeline. And it's the new decisions being made by the hearing examiner following adoption.

So I guess, is there any other comment? Is there a motion to be made? Or I want to move on this? I guess it's the board's pleasure. A motion I'll to direct staff to prepare the item for board decision in an upcoming board meeting. Is there a second?

I can second it.

Okay. Discussion on the motion. So I'll call for the vote on that. All in favor, aye. Aye.

Aye. Aye. Aye.

It's unanimous. Great. Thank you, CPED.

Please prepare that for

Do you want me to enter May 19?

May 19.

Okay. Okay.

Thank you. The exit process is already Nice. To give the public enough notice. Thank you. Okay.

Thank you. Board on commitment to bring updates to you timely. And right now, I think we're I appreciate the team's commitment to bringing information. I'll hand over to our budget and finance manager to herself and go through an April budget update.

Thank you. Good morning, Commissioners. Summer Miller, budget and finance manager, situated in your office. Thank you for allowing me to be here this morning to provide you with the April budget update. This is our fourth update, for this year, the last being the public safety sales tax update and the March update.

And keep in mind, we had one back in January. The year is shaping up to be a really busy one already, and I appreciate being able to provide you with these updates early in the year to allow space and time for thoughtful decisions as we continue to face the structural general fund deficit. Okay. So let's go back to the county fiscal health survey report. The Washington State Association of Counties February 2026 report revealed 26 of 37 responding counties face moderate to significant general fund pressures driven by cost increases and revenue constraints like property tax caps, sales tax volatility, reductions in or uncertainties in state and federal funding, forcing reliance on layoffs and reserves.

The statewide trend emphasizes that the ongoing structural budget challenges in Thurston County, and emphasizes the need for sustainable long term budget and fiscal planning. The same report, Wozak highlights another critical trend. '28 of 37 respondents identify state mandates as a primary driver of or significantly impacting budget imbalances. When the cost of doing business outpaces revenue growth, these unfunded mandates amplify the strain on our general fund. For our county, this isn't a matter of improper resource allocation.

We still remain a lean organization despite the pressures of providing mandated services with inadequate funding. Our leadership and staff continue to deliver and that is really an effort that deserves applause and recognition.

Yeah, it really does considering all the organizational things that have taken place and continue to take place.

You. So moving along, Washington County's long term financial outlook. Current county operations are unsustainable with 28 of 35 reporting counties facing a dire long term outlook without new revenue or mandate relief. Furthermore, 85% of Washington Counties report general fund sustainability challenges, which is indicating a systemic crisis.

And well, just to update the commissioners on, last month, there was a Washington Association of Counties Administrators Conference and quite a great representation from counties across the state. And this was a big topic of consideration, the impacts to budgets and decreasing revenues, the increased costs for public defense and others. So we are definitely not alone. In fact, many counties are barely grappling with how to address their short And with past. Made wish we've we had a two year budget in as well.

But the steps that have been taken in listening to the other dynamics across other counties, whether they're large or small, we're in very much similar state across all different counties. And really when you talk to folks from the National Association of Counties, this is a national dynamic that's taking place.

Spent the first chunk of our meeting about the library with the chairs of the different counties talking about our budget holes and commiserating and sharing kind of what we've been all been doing to try to make things work. Harbor was in a particularly difficult situation. And that's Tony now as well.

Yeah. I think that's important because when the board was tackling this several months back, there was a narrative that somehow Thurston County was creating the optics that we need to cut more than needed or that the deficit was greater because of some past perspectives that maybe that's how former budget officers had approached things. But this definitely is not isolated to Thurston County to our jurisdictions in Thurston County in the state. It's a national dynamic taking place across. The latest edition of Public Managers Magazine has quite a bit of conversation about jurisdictions, whether they're cities or counties across the nation having to reduce their budgets and look at the same very things that we were having to look at as well.

All good points as we move along to our 2026 adopted deficit. In 2025, Thurston County faced a projected $36,000,000 deficit as we developed twenty twenty six-twenty twenty seven biennial budget. Through creative uses of one time revenue strategic expenditure reductions, the Board of County Commissioners provided $24,700,000 in relief to departments and offices. Despite, these moves, we recognize that the deficit would persist After a challenging biennial process, which was marked by, some internal questions over our financial outlook from a few of our elected officials, the board adopted a 2026 budget that remains at a $12,000,000 deficit. Okay.

So we are moving really fast this year and we are already into our amendment one cycle. To walk you through this slide, on the left, you'll see the same 2026 adopted general fund budget, both revenue and expenditures displayed slightly different than the slide before. In the middle, we are calling this scenario one. This is incorporating, the latest estimations and assumptions alongside all amendment one, submissions. I am not including any type of reversion at this time.

And on the right, we'll call that scenario two. Think of this as a straight estimate. It simply is the combination of your adopted budget for 2026 plus, all of the new requests that were submitted in Amendment one without any additional assumptions built in.

I'm sorry. What's scenario one again?

They probably should have been swapped. But scenario one is my current outlook when I'm looking at our actuals and looking at how the budget is performing. It includes all of my estimates, all of my assumptions, all of the items that could drive revenues higher or lower and expenditures higher or lower.

But without any of the requests

It has the requests built in, but it does not have any reversion calculated. Neither one of these scenarios includes reversion.

So I'm sorry. Scenario two, you said has Amendment one submitted. But Scenario one also has Amendment one submitted?

It does, but it includes some of estimations. For example, a little bit less in property tax collection, maybe a little bit less in sales tax collection, and currently forecasting out underspend in all areas of the line item details of the expenditures. But I'm not completely sold right now that those are correct because we've got information that has not been completely updated.

So just to see if I got this, scenario two is like kind of just a mechanical. And then scenario one is that mechanical with your kind of expertise applied with different like tweaking of what scenario two as sort of a starting point of that.

That is correct.

Okay. Thank you. It was confusing when I was going through the slides because it's really important that everybody understand that because you're using that through the next set of slides.

It is the estimation. And I will work to make that more clear in the next presentations because we'd like to build on this as we move along.

I do think this is an important slide, though, because it highlights what you just mentioned. You're working through we're making progress with TC Connect. There's partnership with financial services on closing out '24, '25, getting the internal rates booked. You're also working on some state audits. So there's a lot of dynamics all hitting at the same time.

Your team is also working with the TC Connect team. They're part of the TC Connect team in the long term fixes, which I think you described it great instead of just weed whacking. You guys the team is going to the roots and yanking out the problems, getting them all out. But that takes a lot of time and investment while you're trying to work these things through. So all of that to say, and I'll say it for you, you're still evaluating data.

And we look forward to a time when all of that is synchronized and working well so that the validation take is very quick. But right now, we're not at that point. It's still quite a manual laborious process that you, financial services, and the rest of the county, all the county staff that touch budget are working their way through.

That is correct. Yeah. There are a lot of things at play. So yes.

Thank you. I just was wondering. I don't wanna make you have to explain it 10 more times. But if if possible, do you think maybe you could send a follow-up, like, email just explaining in writing what the each scenario means so that I have it. Because I wanna make sure I have it right if we're moving forward with, like, the similar example.

Mhmm. It's also captured in the financial plan that I provided to you all. There are assumptions that are notated at the bottom that tells you when we're looking at '26, it's in the yellow section. And there is the adopted budget for 2026. There's scenario one, and then there's scenario two.

And then when you look at each of those, scenario one, like I said, is just straight adopted. Scenario two is the adopted plus the amendment one additions. And then scenario one has my current estimations and forecast through the year, keeping in mind that there are still some significant unbooked internal service rate costs and revenues that I need to I have been manually calculating and trying to capture that. So until we get all the actuals for the first four months of the year, five months of the year, I don't feel entirely confident saying, let's lean into scenario two right now. I need to see what the performance looks like with more actuals booked.

So when you look at when we look at scenario two, expenditure levels 151 and then back into scenario one, dollars 141, dollars 10,000,000 less of expenditure because you're can you give us kind of like what's the biggest driver there that would pull that back by $10,000,000

Yeah. Right now, I'm seeing a little lower in service costs, and then a few million dollars across salaries and benefits. Hopefully, that's helpful. If not, I am happy to send you an email and break it all out. Okay.

So I think this is a snapshot.

It is. I'm taking

pictures of a race that's being run,

right?

Yes.

So as we do these updates to the board, you're looking at the race as it's being run. And it could be this or it could be this, but we don't have the end of the race completed yet. And so I think we need to be careful in locking in at any of these scenarios as if they are real time end of the race. This is the middle of the race.

That is correct. The last presentation as well, the March update and the public safety sales tax update. We are trying to impress the idea that there are estimations that are driven by the performance and that changes the forecast. It's all a point in time depending on what we're seeing. So if expenditures are lower at a certain point, it changes the dynamic of the entire year's forecast.

And some departments and offices will have higher spend levels at different times of the year. And for the most part, when I look at historical data, I can pinpoint where those highs and those lows are. It's a little trickier right now because we have a lot of competing priorities and a lot of data that I'm still waiting for. Yes, it is a point in time. It's a race. And as we go a little further into the year, it'll get a little more honed in.

I know there's still a lot of heartburn over the decisions that we've had to make. Are we getting adequate collaboration and cooperation from the various offices on their spending plans and kind of cooperation with the reductions we've had to make?

We have received all of the reduction plans. Some of the ones that were late submitting will, be presented to you in Amendment one. So yes, in that avenue, we've satisfied direction for the cuts for 2026. As far as financial plan submissions, those are they're hit or miss sometimes. I think is sometimes they're all posted when we request them, and sometimes they're not. So I think it depends on staffing. I think it depends on workload.

Yeah. I think where this board has signaled, and I think it's signaled a really great direction of being a lot more intentional and real time in how we're assessing the budget so that the board can be nimble and make needed adjustments, meaning not just reverting dollars back at the end of the year, but really identifying where dollars can be used to augment services since there have been cuts and there could be additional cuts. We really need all the offices to be turning in their financial plans on a monthly basis. That is a tool that is in order to achieve what we've heard from the board and we agree with the board's statements about wanting to get this information and sit with us together as a group with the budget office and then also bring office and departments to the table to talk through why is there a reversion here and there. We need to make sure that we continue the organizational discipline of everybody submitting their monthly financial plans to the budget office so they have a chance to review.

Commissioner Grant.

Yeah. Thanks for this. I mean, first thing I want to acknowledge is that, you know, I reviewed all of the documents and all the backup documents yesterday, and this is amazing work. It was very clear and really easy for me to follow. I'm just really excited that we have it. And so thank you. Thank you guys all for your work. This is really great. And I know that I was kind of going to wait till we got a few slides down, but I think we started this conversation, you know, trying to talk about like what really is in the 141 versus the 151 or scenario one versus scenario two. And actually you have a slide that's a couple down.

I don't know if we can look at it really quick, but two down, that's where it's really broken down on the screen. One more. There you go. That I think everything we were just talking about, like what's in these estimates, right? And I want to make sure, and I know that Emily just asked a question of, can I understand a little bit more about what's in here?

Well, the backup documentation that was sent, Emily, has all of this in it and even broken down even more than this. And so it's really helpful to look at. And, but I want to make sure that there, I have a one question answered for me, which is, so what I'm understanding is, is that the adopted budget is, is column one. The second column is, summer, this is your team, your team's, estimate based on current spend plus the amendments. Right?

That is my, ongoing work in progress. Yes.

Yep. So it's like, this is you saying if people continue to spend the way that they're spending currently, this is where I think we're gonna end the year. And this is, you know, this is and that just is accurate. I mean, I I that's what I saw. So the I mean, I it looked really good to me. Like, I'm like, okay. These look really good based on the current spend, and, so I feel like, you know, scenario one is, you know, what's really gonna happen? And then scenario two for me is just, if everybody spent all the money that they were allocated plus the amendments, that's how much we'd end up spending. Correct?

That is correct. Yep. Okay. So Okay.

Yeah. Yeah. That that piece is way really excited because I know that Summer and Susan have spent a lot of time. It's hard to take sometimes a spreadsheet and turn it into information that can be digested. So the fact that it's clear to that point. Thank you so much, Commissioner Graham.

Yeah. And, you know, and I just wanted to kind of point out to my, you know, seatmates that, you know, what I'm seeing here, and you can see it clearly on the screen is that that, and this talks to the, like the, this discussion around reversion last year where I was like, I don't understand why we revert money back. Well, that's because in the past, everyone's just been allowed to spend, and I'll just talk about the salary. So, you know, if everyone assumes they're going to spend $67,000,000 it's actually like almost $68,000,000 in salaries, but in reality, the spend is much lower because of vacancies and different, you know, people aren't hiring certain positions, just to be cautious. You know, in reality, we really are only gonna spend 65 I mean, based course, again, like Summer had said, this is based on Summer's estimates, and there's a few things that could move up and down.

But, usually, the budget office and their estimates are pretty right and, you know, and that we that we really probably will only spend about 65,000,000 in salaries. That means that we, you know, there if we would have done it like we did last year, there would have been $3,000,000 out on the table left at the end of the year that got reverted back. And I think what's cool about this is that I'm seeing that some are saying that, you know, salaries and benefits are gonna come in a lot lower and supplies. And if you look

at the supplies, that's a

lot of money. That's $400,000 less than supplies. We really aren't going to spend $1,900,000 on supplies. We're going to spend $1,500,000 on supplies. And so that's the way I'm reading this is that, you know, by the time we get to the end of the year, we'll have, we'll not spend as much as we had budgeted. And so, you know, I won't I'll just leave it there. But the Yeah.

Be a $4,000,000 deficit.

Well, I wanna I wanna highlight again that this is my working estimations. Right? And it's point in time, and these figures will likely change slightly, each month's, review and presentation. However, even with the slight adjustments one way or the other, it doesn't change the fact that you have a significant general fund budget deficit that needs to be addressed.

And I think that three components that add to the conversation for summer about where the needle is going to land is we're still working to close 2024. We're still working to close 2025. And we have to book the internal service rates. So that affects the cash flow, operational cash flow of some departments. It affects their balances.

It's nothing that can't be overcome. And the team is working together. Budget, our departments and offices, and financial services are all working together to get that fixed. But those are unique components to some of the transition that we're seeing right now. We won't always be this way. We should be here.

Thank you. So kind of based on what Commissioner Grant said, right, in terms of like just, like, tracking all this information and then going back to the question that commissioner of Warnier asked in terms of the financial plans. Right? Like, for me, I find it concerning, right, that we're not getting this full picture of information, especially if we're because we have to be looking at everything. Right?

And kinda like commissioner Grant, like, pointed out, like, the full picture of reversions and and just everything. I I'm wondering, right, like, me, is it does it need to be board direction, right, that we are getting those financial plans from both departments and offices? That way, we are keeping a closer track of kind of this data on a month by month basis. So, you know, I'm happy to make a motion if it's needed, but like how do I wait till the end? I'm kind of waiting on on the timing here.

Yeah. Think maybe we can get to the end of the presentation. I don't know what has transpired before. But it would be good for the board to clearly lay out its intent that getting those financial plans on a monthly basis are essential to rolling up the information to give the board a clear picture and to do the necessary work that the budget team needs to do to present that information and allow the board to have time to make critical decisions about how to adjust spending in real time.

Summer, when you're talking about the financial plans, right now we're just talking about the general fund. And there are offices and departments that have some, a few, several different funds that require a lot of work right now to put those financial plans together because of I don't believe the report's built yet, but maybe I'm wrong. So when you refer to the plans coming in again, we're talking about general fund. Are you referring to financial plans from departments excuse me, from offices not coming in regarding the general fund? I'm talking about all. Right. But what about the general fund, which is what specifically is being talked about here?

Both, the general fund and all other funds. The general fund is really important for me. If you opened the Excel spreadsheet that has the expenditures broken down by department, all those cells can expand. And it becomes like this multi page document. I can build a model for every department and office in the county based on budget appropriations and what I think they'll be spending.

But the financial plans, general fund or not, when they're submitted and they're reviewed by myself or my team, there could be assumptions built into their plans that I know nothing about. Maybe they I'm just making this up. Maybe they're going to go buy 10 new boats. And I didn't know anything about the boats because I wasn't in the meeting about the boats and my team wasn't. So they would incorporate that into their financial plans, which then triggers a question from me or one of my team members as to what is this jump in expenditures for.

And if it's sound and I know that it won't move forward, then that's something I can incorporate in addition to what I see based on past performance and what I know is happening in the budget world and kind of mash that all together. When we look at some of the creativity across departments and offices in general fund and shifting expenses to some of their other funds, I also need to be able to look at those pictures. I can rebuild them myself. But again, I'm rebuilding them based on budget appropriations and past performance without any of the internal operational knowledge that these budget and finance staff have. And it takes a lot of time for me.

So if they're maintaining these plans, I think there's a few benefits. Number one, it provides operationally to the leadership in those departments and offices a forewarning of what their financial positions are. And I think it also provides me safeguards to provide you the best possible information at a point in time. And whether or not shifts from general fund to another fund that they manage or vice versa is something that is sustainable.

Can I ask a question about services? That seems to be the biggest adjustment. And what's embedded? Give us a few examples of things that are in services that are coming in lower cost than what we budgeted.

I doubt there's lower costs.

It could be services could be costs associated with grant funding. It could be associated with maybe some contracts within the departments. I'd have to really dig down into the details if you want that level of detail. But that is what's coming to the top of my head right now.

It's a matter. It's almost like it's not like a one single kind of thing driving that reduction. It's kind of a broader

Yes. And also keeping in mind that I'm taking performance and I'm building that out through the year, right? And so I'll need to see if there's any changes at a department level or if there's any changes once interfunds are booked so that I can see where my estimates landed compared to the actual performance.

One more quick question. Is there anything about I didn't see in the slides, but do we know anything new regarding like the sales tax trends so far this year? Is it where we thought it would be less or more?

It is coming in where I thought it would land. So we closed 2025 performance over '24 in general fund specifically at just under 1% growth over the prior year. And we're tracking in very similar nature right now, about 1%.

To

elaborate on the question that Assistant County Manager Jennifer Walker asked, There are departments who have a number of funds. Primary focus right now is on the general fund financial plans that come in from offices and departments. Those are essential in to feeding. Now, obviously, we need information from on all funds. But regularity of those may not be as consistent as once a month per se. In some cases, the budget office hasn't received financial plans for months, if not close to a year. That's what we have to avoid because it creates a blind spot into how we're trending.

Josh, I'm sorry I cut you off.

No, that's officially covered it.

Commissioner Meehan.

Thank you. Thank you, General Manager. And honestly, that's kind of what I find concerning. So the board is responsible for all funds. And so therefore, we need the financial plans for all funds, especially during this budgetary time. So that would be the general direction I would want to go to, not just the general fund but all the funds.

I'll go back to presentation.

Sure. Thank you. Thank you for the conversation. And I think my remote has fallen asleep. Amy, may I

You were on slide five. So you There

we go.

No, we were on six. We go to seven.

Okay. So we're moving on from six. We're going to seven. This is a scenario one, just a little different detailed view. We're gonna be on number seven, please.

I think my remote woke up. There we go. Okay. So, this includes our budget estimations and assumptions as well as amendment one submissions as we just discussed, not including the reversion. We show a projected fund balance of $15,400,000 which is slightly more than a one month fund balance of $12,300,000 which is necessary this year, but still less than the required two month fund balance of 24,600,000 by $9,200,000 Please remember that Resolution sixteen-ten requires a two month fund balance or in 2026, the twenty four point six million

Can I ask on the sorry to interrupt you again? But you said that the Amendment one requests and I know there's a lot of things that we have to do in Amendment one just mechanically. But there's always requests for more stuff. And I'm guessing are we talking about that stuff that the board will have the discretion to say yes or no to? Or are you talking about things that have to be done in Amendment one when you say you've added Amendment one stuff into these scenarios?

I will say that the majority, if not all, of the requests that were submitted in amendment one fits within board direction. And those that don't, they are required changes due to maybe some mandated services or something that we need to account for. So I haven't pulled any Amendment one request out because when I go through the list, they're either backed by revenue, maybe a grant, or something along those lines. Or they're fully explainable and justifiable.

Okay. So it's people following the direction that we sent. So they're kind of almost in the must do type category.

Yes. Because if there are requests that aren't backed with revenue, we would bring those to the board for their awareness, and talk through the impacts.

Got it.

Yeah. The amendment one was quite successful in my opinion as far as well as submitted. Okay. So we'll move on to scenario two, which we will call it straight estimate and, the one that is giving you the view of accepting all of those requests. Let's see.

This gives us the projected ending fund balance of $8,600,000 and a one month fund balance deficit of $3,700,000 and a two month fund balance deficit of 16,000,000 So a little bit better than our last presentation, but you can see that the fund balance deficit still persists with the adopted budget and the amendment one added in. So this is the slide that garnered the conversation a few moments ago. We'll move along to fund balance projections on slide 10. During our March budget update, it was that one past. To So we're assumptions and amendment one built in.

Please keep in mind when we're looking at, 2027 and beyond, that those out year projections of a negative fund balance are for illustrative purposes only. They serve as a clear warning of our current trajectory and not as a goal. The budget and county management teams are fully committed to working with the board to ensure we never adopt a budget that actually produces these outcomes.

If we could just go back for one quick second. When we're talking about, Amendment one

Just wondering one more.

I'm talking about Amendment one. Are all the Amendment one requests from office and departments backed by revenue? Not all of them, no. Okay. The ones that are not, I'm going to talk through those just generally talk to those items.

So I

think we've lost over and made it sound like all amendment one had revenue backed.

They're not all revenue backed. There are quite a few that are revenue backed. There were no requests submitted outside of board direction for, say, a whole slew of new positions or new program costs. But there are some costs that are incorporated as far as shifting costs for the public defense caseload standard mandate. That is one of the costs. There are some adjustments, technical adjustments that needed to occur.

That's what you're referring to as those costs that are increasing the deficit. Those are things that the board's aware of and has taken action and direction to provide.

Yes, I would say most of them. There might be a couple of items that I'll need to look at a little more closely to see what and if the board can maybe discuss some other alternatives. But that'll be next week when we bring that forward. Hopefully next week. Hopefully it's not a week delayed, but it should be next week.

And you're talking about the discussion where we're to focus just on the amendment. And go through everything that's been submitted and do a deep dive into that.

Yes. Don't forget, currently, have scheduled Amendment one adoption as June 2. And first review is next week on May 6. And the second and final review with the board with decisions is the following week on May 13. Thanks for going back.

I appreciate that.

Yeah, of course. So hopefully that was clear. Commissioner Mentzer with the, one and two month figures that are embedded in there. Great. Good job. Okay. So fund balance. As presented previously, guidance provided by the state auditor's office is that our budgeted expenditures or estimated expenses should be limited to the amount of budgeted revenues plus the beginning fund balance. Governments are not allowed or authorized to appropriate more resources for expenditures than are available. And that information can be found in the SAO BARS manual budget process two point four point two point six zero.

Okay. So let's move on to reversions. As a reminder, the scenarios on slide seven do not account for reversion. While it's normal to have some, funds left over from things like vacancies or underspent programs, We've discussed in these budget updates removing reliance on those dollars to backfill our deficit. The leftover funds should contribute to our ending fund balance and bolster the next year's start, not be a primary survival strategy.

At the end of the day, our beginning balance plus revenue must consistently exceed our expenditures to keep us sustainable. Okay, so we're going to talk about the budget stabilization fund. So as we continue to navigate our budget deficit and ways to address the shortfall conversations may naturally go to the budget stabilization fund as a means to bridge the gap. Currently, we hold $4,000,000 in our budget stabilization or reserve fund. This is just shy of onethree of our one month fund balance needs and over 16% of two month fund balance needs.

At this point in time, that's not enough to fill our deficit. Additionally, the resolution requires that three primary components be met before the funds may be accessed. The first are non debatable emergencies as defined in RCW three thousand six forty one-eighty, and that would include fire, flood, explosions, storm, earthquakes, riots, epidemics, insurrections, etcetera, with a unanimous vote of the board. The next item that would need to be met is adverse actions by the legislature exceeding an impact on the general fund of at least $500,000 And the third is if the general fund balance falls below $10,000,000 due to revenue shortfalls.

On that one, that would surprise me because I had remembered the language being something more like severe economic downturn versus revenue shortfall. I think that's a meaningful distinction. So I was sort of is that a quote from the policy revenue shortfall?

I pulled this directly from the resolution language. Yes.

Interesting. I don't know how I remembered it.

You like me to send it out for you? Or

I've got it. Pile in my budget I'd appreciate that. I'd love it.

Okay. Yes. You've got it. Thank you.

And that's not to say that the Board can make other decisions with resolutions, but that's what we have currently. Okay. So just as last year, in March 2026, the Board approved a motion to prohibit the fiscal year twenty twenty six request to the general fund, which would add to expenditures to include positions or reclassifications. This action is driven by the need to preserve the general fund and to work towards budget stabilization. And to wrap up, we are going to talk about the general fund deficit and its persistence.

Without new revenue sources or further expenditure reductions, our cost will simply continue to outpace our income. And we began deficit spending in 2023, a trend that continued through 'twenty four and 'twenty five and is now built into our 'twenty six, 'twenty seven biennial budget. This confirms that our challenge is structural and addressing it is our primary focus as we move forward in this year. And that is it from me. If you have any questions, I'm happy to answer them. And if I'm unable to answer them, I'm happy to take note and bring those answers back to you in our next presentation or send something out to you by email if you prefer.

Any questions for me? Don't have

a question. I've said before, and I know it's not it can't be part of a budget presentation, but we can't there's a hole in our strategy, I feel, and it is overlooking economic development. We can't just cut our way out of the budget deficit. We also have to figure out ways to increase our revenue. That's not for this discussion, but it is one of our top three priorities. And I do think that there's more juice that we could give to that conversation and there's a lot of work that is yet to be done kind of in that sphere. So I hope that we can plan on, coming up with some ways to tackle that.

Other questions or comments?

I'm ready to make a motion, Chair. So based on the conversations of all that we had in regards to the financial plans, I would move to direct all appointed directors and elected officials to submit a monthly financial including spending projections and assumptions, to the budget office for all funds managed by the department or office effective immediately.

Second. Discussion? I have a question. So there was kind of back and forth about general fund versus other funds versus monthly versus county manager you were talking more about. It sounded to me like the problem was where there was like a multi month hole in sort of inputs to the budget office versus the lack of a I got January, got March, I didn't get February.

So I guess I'm wondering is that Commissioner Mihiel's motion has stated sounds pretty tight. Does it need to be that tight to accomplish what team needs? What I'll say, Chair,

is that understanding departments are doing a great job of getting the information to the budget office. I think there's been some holes in some other areas. I do we're here talking about this. Some departments, for example, public health, public works, they have a lot of different funding sources that come through. And so I we need to get that information.

I believe we are getting it. They work very collaboratively with those two departments. I just want to make sure that we understand that if that time frame, that sequencing is gives them enough time to turn things around. And I don't know if you have anything to add somewhere on that.

Well, to Commissioner Menser's statement, if a plan is submitted in January and February is skipped, we would like to receive notice as to why. And then if it's submitted in March, it would encompass the February data points. So not too bad there. But when I am asked questions specifically about specific funds and I haven't received a financial plan in twelve to fifteen months, that's a little concerning. And keep in mind, there are hundreds of funds, right?

So myself and my team, I have two members now. So we are a team of three. And I am very much a working manager. We do our best to go through all the financial plans as submitted and highlight the ones that we want to discuss when we meet with the programs monthly to get our questions answered. But we don't always recognize when financial plans have not been submitted regularly.

So it is important that they're submitted regularly. It's also important that the fiscal staff notify us if there will be delays. And for the most part, I would say the majority of staff do notify us when there will be delays in submitting.

I got Commissioner Grant and then Commissioner Lehman.

Yeah. Well and I, you know, I I just wanna say on this that, you know, I think that there I think that this is a big step forward. I'm I'm really glad that we're going to move forward in this. I think that, you know, just to tie your comment about, you know, if they miss a month, I think that in other agencies, places this is you know this is a normal thing for a budget office to ask for. It's a normal cadence for spending plans to be produced on a monthly basis and I think that you know once that get you know we get into that cadence and that everyone starts doing that in working with the budget office then you know I think that really shows our constituents and others that we're looking really closely on a monthly you know, very closely and very intricately at all of the different pieces of our budget.

And it's just good budget work. And so I think it's something that we just need to move forward with.

Grant

kind of went through my

points on a monthly. Why?

Are we referring to the one year and the ten year when you say financial plans? What are you referring to when you say financial? We're referring to all. So is that the one year and the ten year? Yes. On a monthly basis? Yes. And that

has been the request to departments and offices for

I know. I'm seeking clarification.

Yes. It's for both. And if there's necessary if there's support requested, the budget team has figured out various ways to this is going to get a little technical to pull raw data and create pivots in the financial plans that once you pull the data and you put the pivot data into the financial plan, it can auto populate some of the months within the plan. So it's a little tricky, and it might take a couple of iterations of walking folks through that. But we are more than happy to help them establish those formats and how to make that work.

I just know we're very leanly staffed, I don't want to be asking for more than what we need to do the work. But it's based on what Commissioner Grant said, based on what you're saying somewhere, we don't have a problem with this, I guess, if it's we've been asking for that, and we think that it's needed to do with what the Board needs to do.

Yes. It's critical for you to have the best information to make really difficult decisions and have these conversations as we move through

the year.

Other discussion on this motion? Call for

a vote.

All in favor, aye.

Aye. Aye.

Motion carries unanimously.

Thank you. I look forward to coming back and visiting with you next week.

Thank you.

And the week after that. And the week after that. Thank you.

All right. Next up is commission reports on external committees. I'll do

a quick one. The regional housing council met last week, and, we had a couple, well, we had a lot of really good conversations. A couple key highlights from the agenda are the approval of the 2026 work plan. We had a couple updates including adding a regional housing outcomes report, which was a recommendation from the tech team. And, in that report, they would summarize existing funding.

And then we also talked about having more discussions this year around the housing production barriers. It sounds like the city of Tumwater has hired a consultant to identify strategies to address housing production barriers. So we're going to be looking at their project when they're complete to see if we can it's something we can apply regionally, if there's any components of that study that we can apply regionally. So that's pretty interesting. We also

Who's doing the study?

I just know that they have a consultant that I can't remember.

No. That's all. I mean, they got a consultant to. Yeah.

And then we also reviewed and approved some of the yearly funding packages, totaling nearly 9,600,000, which fully funds nine projects, supports creation of new housing units and preservation of existing units. And then, of course, we allocated additional funding to Olympia's Quin Street Village, tiny home project, which we talked about, last week as a board. And then we also talked a little bit more about the funding process, which we've all been kind of in the loop on that's related to the letter from the mayors and the chair. So we're still continuing to work on planning around that. We also discussed in terms of process improvements, which will help with that planning effort.

Moving forward, we'll be incorporating in person work sessions to talk about funding, topics so that we can kinda dive deeper into the weeds of what's going on with the funding, and everybody can have a full picture of where funding comes from, where revenue comes from, and where it's going. And then we also talked about, separating discussion around funding decisions from decision making. So potentially breaking those conversations out into two separate meetings where we receive information about the funding, have a chance to go back to our jurisdictions and provide a report, and then come back for decisions on the funding versus having it all in one meeting. And that is it for RHC. And then we had a JASCOM meeting and did our typical shelter statistics through March.

We talked about the fact that there's an overall slightly decreased intake compared to last year, and dog intake is trending down. One thing I wanted to highlight, which is pretty exciting, is that Best Friends Animal Society and Joint Animal Services approved an agreement where Best Friends Animal Society will provide one staff member for on a six month basis at no cost to the city or animal services. The staff member will focus on improving outcomes, increasing positive outcomes, and reaching a 90% live release rate of animals, so 90% no kill shelter. And this staff person will also provide additional expertise and program support. And that is all I've got for JASCOM.

Commissioner reports? Committees? No. Other commissioner items? I had a question for maybe county manager and clerk of the board. So we have an upcoming appeal related to battery storage. And I'm wondering, is there a chance to get a session with the prosecuting attorney like before that so that we can focus our like as soon as possible, frankly, in the week of couple of weeks before.

The pre hearing closed session, as we typically do, is scheduled for May 12. Perfect. The appeal hearing itself is scheduled for May 28. All right.

Thank you. It's a huge record, so it would be useful to have some guidance from the people. Okay. Other crucial items?

All right. We're adjourning. Nothing. I'm being What?

Who are you?