November 2025 Message from Councilmember Libby Urner Wennstrom

November 5, 2025
 

City Budget: Putting Your Tax Dollars to Work

Bike lanes, staff, or fixing backhoes?  Sewer infrastructure or water meters? Stormwater management or police equipment?  The City budget process reflects a series of choices – some large and some small – that add up to form a picture of our priorities for our community. How we as a City set those priorities, and how we ultimately choose to spend our tax dollars, reflects our values as a community.

Unlike the Federal Government, Washington cities are required by state law to adopt a balanced budget every year – budgeted expenditures can’t exceed anticipated income.  State laws also govern how the various “buckets” of City funds can be spent. For example, grant funding designated for particular street repairs HAVE to be spent on those projects.  Lodging tax funds can only be spent on tourism promotion.  Library Levy funds have to be spent on the library.  Utility rates support the costs of providing utilities.  The City has 30+ separate funds, each designated for different, specific purposes.  We can’t use sewer fees to pay for filling potholes.

City reserve funds are different “savings accounts” designated for specific purposes. City and state policies dictate how much money the City keeps in reserve, from “Rainy Day Funds” to saving for long term repair and replacement for equipment, facilities, or fleet vehicles.  Moving money from one of these savings accounts into another isn’t “deficit spending” – it’s clarifying how we’re planning to use our savings to meet our long term goals. 

This year, the City established a new Equipment Repair & Replacement (ERR) fund – a new “savings account” specifically set aside to plan for equipment repairs and replacement over the long haul.  This new fund follows previous successful efforts to proactively plan and save for fleet vehicle replacement and facilities repair needs.  Planning for predictable repair and replacement costs gets us out of crisis mode, and lets City departments budget more effectively.  We know that boilers or windows are eventually going to fail, that vehicles will periodically need replacing, and that keeping key equipment working well saves both money and time. By setting aside funds every year towards these eventual expenses, we can break the cycle of needing to take on debt to cover “emergency” repairs.

The City hasn’t taken on any new debt since 2020, and has actively paid down debt early to reduce interest costs.  This strategy of planning for anticipated needs, reducing debt, and focusing on sustainable, long-term planning are all pieces of Port Townsend’s award-winning Financial Sustainability Initiative – a multi-year planning process that’s helped put the City on stable financial footing and become a model for other small cities.

November is Budget Season, the culmination of work that began last July with our Strategic Planning workshop. Over the next month, departments will finalize their budget requests, and the draft budget will come before City Council for final approval.  If you’re curious about how your City dollars are being spent, it’s a great time to read the proposed budget, check out our new How Your City Budget Works video and ask questions.