(The Center Square) – The Yakima City Council heard another update on Tuesday over its proposed biennial budget, which uses almost 85% of available general fund reserves to match how much they’re spending.
The budget sees revenues and expenditures increasing into 2025 before falling below what it made and spent this year for 2026. While one of the primary goals over the next two years is to rebuild general fund reserves, the proposed budget does little to achieve that so far.
Local law requires the council to commit at least 16.7% of expenditures toward its general fund reserves. However, with spending outpacing revenues each year, the reserves are only getting smaller, falling further behind that threshold as federal pandemic relief dries up.
“Revenues are not matching up with our expenditures,” Finance & Budget Director Viren Mayani told the council, “I say that intentionally because expenditures … in the general fund remain static.”
Yakima plans to spend $81.6 million through its general fund in 2025, compared to $72.1 million this year. However, Mayani only projects the fund to bring in $74.7 million for a deficit of $6.8 million, taking its reserves from $18.3 million to $11.4 million, only 14.1% of the 16.7% required.
The city intends to spend $85.4 million through the general fund in 2026 while generating $76.7 million for a deficit of $8.6 million. Closing that delta means reducing that $11.4 million in reserves, already below the mandated threshold, to $2.8 million, or 3.3% of the 16.7% required.
If the council were to dedicate the entire mandated amount toward maintaining its general fund reserves, it would leave an overall deficit of $2.15 million for 2025 and $11.4 million for 2026. Future budget projections show a general fund deficit of upwards of $50 million by 2029.
The council can take action to remedy this before then, but it’ll require a sustainable approach.
“The whole city, including the general fund,” Mayani said, “the deficit is $8.4 million [for 2025] …, almost $12 million [for 2026].”
While the general fund typically acts as a financial indicator for the city, it’s only a portion of the budget, which includes over $313.6 million in spending but only $305.2 in revenues for 2025.
The proposed 2026 budget earmarks $286.8 million in spending, 8.5% less than in 2025, but revenues will drop even further. Mayani’s projections show Yakima generating $274.9 million citywide in 2026, 9.9% less than anticipated for 2025.
Yakima still has over $130 million in total reserves, including those in the general fund, and will likely have to utilize a portion to close the citywide deficit unless it can identify more cuts in time.
The city council will vote over approving a final version of the budget in the coming weeks.
