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Home My WebLink AboutWORKSHOP re 2027 Budget Resolution JEFFERSON COUNTY BOARD OF COUNTY COMMISSIONERS AGENDA REQUEST TO: Board of County Commissioners Josh D. Peters, County Administrator FROM: Judy Shepherd, Finance Director DATE: August 10,2026 SUBJECT: WORKSHOP re: 2027 Budget Goals and Objectives and POTENTIAL ACTION re: Resolution No. re: Establishing goals and objectives with budget preparation guidelines for the 2027 Budget STATEMENT OF ISSUE: The Board of County Commissioners adopts a resolution at the beginning of every budget cycle to establish Budget Goals and Objectives with Budget Preparation Guidelines for departments and elected offices as they work to prepare a balanced Jefferson County Budget for the coming fiscal year(i.e., calendar year). Due to the budgetary significance of the ballot measure for a Parks & Rec Levy Lid Lift, the budget resolution was delayed until following the August 4, 2026 primary election. The attached resolution shall establish Budget Objectives and Procedures for the 2027 Annual Budget. ANALYSIS: The proposed resolution provides guidelines for preparing the 2027 Annual Budget. It addresses the County's current financial realities and supports a focus on improving our five-year projection. The passage of the levy lid lift to support Parks & Rec enables the County's General Fund to rebuild its reserves and strengthen cash flow as we move into 2027. We continue to face challenges from rising costs that affect mandated services for which we receive partial or no funding. A few highlights are listed below: > Unreserved Fund Balance—It is possible a portion of the projected year-end 2026 General Fund balance will be needed to present a balanced budget. > 2027 Departmental Budgets within the General Fund: • Departments will identify non-discretionary expenditures and request additions to their budgets for any non-discretionary expenditures using the General Fund Add Request Form. • Discretionary expenditures shall have limited increase, focusing on training and associated travel. As a practice, departments are encouraged to continue to reduce these expenditures where possible to augment budget required in other areas (e.g.,professional services, service contracts). 1 • Included in the budget strategy will be a proposed staffing pause policy (a form of hiring freeze), which will be considered by the Board in a separate resolution for FY27. • Capital Expenditure limit will be set at$5,000; expenditures over this amount will be reviewed as part of the Add Request process. > Other Funds: • All new and existing transfer requests shall be submitted in compliance with the General Fund Assistance Policy. • Recommended reserves, in accordance with Resolution 41-19, are expected to be maintained. If a fund reserve falls below the recommendation,the department shall submit a plan to restore the recommended reserve. • Fees shall be reviewed to align with recapturing the cost of service being provided. FISCAL IMPACT: The Resolution supports adopting a balanced 2027 Annual Budget. RECOMMENDATION: Adopt the proposed Resolution establishing the attached Goals and Objectives with Budget Preparation Guidelines for the 2027 Annual Budget. REVIEWED BY: 1 96 Jos i ). Peters, County Administrator Date 2 STATE OF WASHING TON County of Jefferson In the Matter of Establishing Goals and } Objectives with Budget Preparation Guidelines } RESOLUTION NO. for the 2027 Annual Budget } WHEREAS, limiting the growth of department and elected office non-salary and benefits budgets makes possible improvements in compensation and provides a hedge against an economic downturn and possible reductions in Federal and State funding; and WHEREAS, we have an obligation to account for these fiscal realities as we prepare the 2027 Annual Budget; NOW,THEREFORE BE IT RESOLVED,that the Board of Commissioners of Jefferson County does hereby establish the following objectives and procedures to guide the development and adoption of the 2027 Annual Budget: I. GOALS AND BUDGET OBJECTIVES 1. Balanced Budget - The budget, when adopted, shall be balanced within available resources. In addition to annual fiscal objectives, there should also be a focus on long-term financial analysis. The County shall continue to use multi-year budget forecasting for analyzing impacts the current budget will have on future revenues and expenditures. 2. Use of Unreserved Fund Balance - It is possible that a portion of the projected year-end 2026 General Fund unreserved fund balance will be needed to present a balanced budget for 2027. Unreserved fund balance is over and above the General Fund reserve target, which is set by Resolution at 15% of General Fund expenditures. Sufficient General Fund balance must be maintained to preserve a sustainable operational cash flow. 3. Property Taxes - Growth in property taxes for the General Fund, Road Fund, and Conservation Futures Fund shall not exceed the 1%limit,plus taxes collected on new construction. 4. Sales Taxes- The County shall budget and administer General Fund sales tax revenues including taxes consistent with Jefferson County Resolution No. 32-10 (Special Purpose Tax levy resolution). 5. Extraordinary General Fund Revenues - Continue to use available General Fund revenues such as federal Payment in Lieu of Taxes(PILT) to support Board of County Commissioners objectives and County Strategic Plan goals. Some General Fund revenues are volatile, varying significantly year-to-year (e.g., private timber harvests, DNR Forest Board Trust revenue, and investment income), and some are non-recurring. If revenues are received above the adopted 2027 Original Budget,the excess shall be dedicated to backfill shortfalls in other General Fund revenues first,and remaining excess revenue may be dedicated for any of the following purposes: Capital Improvement Program, Construction and Renovation Program, other one-time costs (including staffing expenditures to address retirement transitions),and for additional reserves to backfill future revenue shortfalls from volatility. Certain non-recurring revenues that are intended to pay for or reimburse the County for services it provides (e.g., state extraordinary justice appropriation) may also be retained in the General Fund for those purposes. 1 6. Board of County Commissioners Priorities- Priority for budget focus is to`maintain what we have," where possible, using a lens of mandated v. discretionary services for considering potential expenditure reductions. 7. County Strategic Priorities - The County' s Strategic Priorities, outlined in the County' s Strategic Plan, are important strategies as continued progress is being made in the areas of community resilience, economic viability, environmental stewardship, housing accessibility, organizational health, and thriving people. 8. Maximize Grant Funding - The County will continue to maximize its efforts to obtain grant funding, whenever possible. 9. General Fund (001) Preliminary Budget - All departments shall prepare preliminary budgets consistent with the following steps listed in Section II Budget Preparation Guidelines of this document. In addition, all of the following requirements shall apply: a. 2027 Salary & Benefit budget projections shall be prepared by the Finance Director. b. Internal Service cost for Facilities, Information Services, and Equipment Rental (ER&R) allocations for 2027 shall be provided by these funds. c. 2026 Quarterly Appropriations shall be applied as follows: i. One-time appropriations to department budgets in 2026 shall not be included in the 2027 Preliminary Budget projection. i. Resolutions for on-going appropriations shall be included in 2027 Preliminary Budget projection iii. 2026 Quarter 3 Budget Appropriations approved as on-going shall be added to the 2027 Recommended Budget. iv. The 2026 Quarter 4 Budget Appropriations approved as on-going shall require a 2027 Budget Appropriation. d. General Fund add requests shall be submitted for externally driven, non- discretionary and discretionary costs using the General Fund Add Request Form. e. There shall be opportunities to provide collaboration within General Fund Departments to discuss process and challenges, working together to provide a balanced budget. 10.Other Funds (104-507) Preliminary Budget - Funds shall prepare preliminary budgets consistent with the following steps listed in Section II Budget Preparation Guidelines of this document. In addition, the following will apply: a. All operating transfers from the General Fund to other funds in 2026 shall be reviewed. All new and existing transfer requests shall be required to submit in compliance with the General Fund Assistance Policy. 2 b. Budgets for other funds shall be prepared as balanced budgets. c. All increases, including any wage and benefit increases, shall be absorbed within available resources or offsetting cost reductions within that fund. d. Recommended reserves shall be maintained for each fund as established by Resolution 41-19. Where fund reserves are below targets, funds shall submit a plan and schedule to restore reserves as soon as practicable. e. Fees shall be set at levels that recapture the cost of the service being provided,where possible. II. BUDGET PREPARATION GUIDELINES 1. Overview. Budget requests shall be prepared in a consistent, public friendly format that clearly identifies the resources needed and the services to be provided by each program. 2. Format and Schedule.Departments shall prepare budgets following the standard format and schedule provided to them in the 'Call for Budgets' from the County Auditor, including,when applicable, General Fund Add Request (see#4, below). 3. Budget Narratives. Departments, funds, or each major division or program within each department shall prepare a narrative, telling a story that is easy to understand. a. The department's mission statement in a clear concise statement explaining the purpose of the division or program. b. Departmental and program revenues, expenditure summaries and impacts anticipated by increased or decreased funding. c. Include grafts, photos,that presents the story. 4. Additions to General Fund Base Budgets. General Fund Departments requesting a one- time or on-going increase to their base budget in 2027, shall use the General Fund Add Request Form to request,designated by non-discretionary or discretionary.This form will also be used for Capital Expenditures or $5,000. 5. General Fund Transfers. Funds requesting a General Fund transfer shall submit in accordance with the General Fund Assistance Policy. All funds previously receiving an operating transfer shall also be required to submit in accordance with the policy. 6. Proposed Revenues,Expenditures.Budgets submitted by each Fund or Department shall be reviewed for their impacts on the County's financial health for the next three to five years. 7. Budget Day. County leadership shall participate in Budget Day with the Board of County Commissioners on October 13, 2026. This is an all-day event and attendance is required by one elected, director or designee of each department/fund. 3 APPROVED AND ADOPTED this 10th day of August,2026. JEFFERSON COUNTY BOARD OF COMMISSIONERS Greg Brotherton, Chair Heidi Eisenhour, Commissioner Heather Dudley-Nollette, Commissioner ATTEST: APPROVED AS TO FORM ONLY Philip C. Hunsucker, Chief Deputy Carolyn Gallaway,CMC Clerk of the Board 4