(The Center Square) – The Yakima City Council is scheduled to adopt its 2025-26 budget on Monday night, closing a deficit that could’ve reached upwards of $50 million by 2029 if the officials didn’t change course.
The biennial framework that will carry city spending through 2026 does not balance revenues with expenditures; instead, it relies on reserves to come out on top. In years past, city policy required the council to reserve a balance of at least 16.7% of general fund expenses, but not anymore.
Last week, the council approved a resolution dropping the general fund reserve policy to 12%.
“The proposed budget for this biennium is firmly rooted in the current realities we face today,” City Manager Vicki Baker and Finance and Budget Director Viren Mayani wrote to the council.
According to a budget summary in Monday’s agenda, Yakima hopes to generate $71.1 million through its general fund next year while spending $75.6 million. The $4.5 million deficit will leave nearly $12 million in reserves, roughly 16% of expenditures and above the new policy threshold.
However, Yakima will generate about the same amount the following year while spending $79.3 million. The discrepancy results in an approximately $7.8 million deficit for 2026, leaving just over $4 million in general fund reserves, only about 5% of the 12% required.
Communications Director Randy Beehler told The Center Square that Yakima has until Dec. 31, 2025, to make additional adjustments to meet the 12% threshold. While the biennial budget is intended to guide spending through 2026, he said it only needs to balance the upcoming year.
“This anticipated decrease underscores the need for ongoing attention to fiscal management and strategic planning,” Baker and Mayani wrote in their letter.
Mayani previously attributed some of the deficit to poor long-term planning. Prior budgets used federal COVID-19 pandemic relief aid, which are one-time funds, for recurring expenses; now, Yakima is facing the same situation as others across the state as the funding has gone dry.
Baker and Mayani want to create a budget advisory committee to prevent situations like this from occurring again. According to the preliminary budget, projections from last month showed the deficit would surpass $57 million by 2029 if the council had not reduced the reserve policy.
Yakima’s entire budget, which encompasses the general fund and every other account, includes nearly $600 million in spending through 2026. Still, revenues fail to keep pace, requiring the city to use some of the approximately $130 million it has sitting in its total fund balance.
The balance is typically saved over time and used for larger infrastructure projects planned years in advance. After all is said and done, assuming the council sticks to Monday’s proposal, Yakima will have $122.6 million left in the total balance, which includes general fund reserves.
“The Council and city staff have invested significant effort in navigating this complex process,” Baker and Mayani wrote, “exploring innovative solutions to maintain current service levels for our community.”
