PORT ANGELES — As part of the city of Port Angeles’ budgeting process, the city council heard a lengthy presentation on where the city’s revenue comes from.
City Finance Director Sarina Carrizosa presented the 2026 budget revenue sources to the council on Wednesday night.
“Our revenues do have a number of guidelines, requirements and restrictions that are in place as we’re preparing the budget each year that we must keep in mind,” Carrizosa said. “While revenue is one of the most important pieces of the budget, because without revenue, spending cannot occur, we do have to keep that in mind. We’re very fortunate that we have a number of revenue sources, and each of those revenue sources does have very specific spending requirements.”
The finance department takes a conservative approach to estimating revenue sources, she said, and it also took into consideration current economic indicators and high inflation for the 2026 budget.
Total revenue planned for next year is $188.9 million, including the use of reserves for capital needs, Carrizosa said.
“Overall, that’s an increase compared to the 2025 amended budget of about $25 million, and that’s largely due to the use of reserves that’s expected as well as total grant revenue planned primarily for transportation projects,” she said. “We do have increases for charges for services and one-time transfers for capital needs as well that are expected in 2026 that are also contributing to that increase.”
The city’s revenue comes from multiple categories, according to Carrizosa’s presentation.
Charges for goods and services account for 45.46 percent of the budget, while intergovernmental revenue is at 15.04 percent, used reserves is at 13.92 percent, taxes are at 11.34 percent, miscellaneous revenue is at 6.82 percent, other financing sources are at 6.10 percent, and licenses and permits are at 0.82 percent.
The general fund is the main operating fund for the city. Accounts that fall into that category are for the city council, city manager’s office, finance, community and economic development, police, fire, public works administration and engineering, and parks.
“As we look at our general fund revenue in total, you can see it’s a much different picture than what we see for our all city revenues,” Carrizosa said. “So we have about $27.4 million in revenue collection forecasted in 2026. That’s about a $140,000 increase as compared to the 2025 budget, or roughly half a percent on the increase.”
The largest increase will come from taxes at $824,000, she said. That comes from a 1 percent increase as allowed by state law for property tax of roughly $52,000. The city is anticipating a $376,000 increase to general sales tax and a $372,000 increase for utility taxes.
The city is anticipating a decrease from grant revenue and state shared revenue, Carrizosa said.
For the property tax levy, the city has a statutory limit of 1 percent of the full fair market value of the assessed valuations, Carrizosa said.
“The amount cannot be more than 1 percent without being voter approved,” she said.
The city is estimating collecting $5.25 million in property taxes in 2026, which is a slight increase over the 2025 budget.
Special revenue funds account for and report the proceeds of specific resources that are committed for purposes other than debt service or capital projects, according to the presentation. These funds come from lodging tax, street department, Real Estate Excise Tax I & II, PenCom, business improvement area, housing fund and code compliance.
“These are areas in state law where we’re allowed to collect for specific needs,” Carrizosa said. “We are required to track those separately in a separate fund to ensure that those are being utilized properly in accordance with each of the requirements by law.”
The city collects a 4 percent tax on lodging, which includes hotels, motels, short-term rentals, campsites and any services that are for overnight stays. There is a planned increase of about 11.2 percent for next year.
The city also has enterprise funds which account for activities for which a fee is charged to external users for goods or services, according to the presentation. These funds come from electric, water, wastewater, stormwater, solid waste, Medic 1, harbor cleanup and conservation.
“These funds must be used for the operational capital needs of the utilities and any time spent assisting other funds is charged directly,” Carrizosa said.
The city is expecting about a $2 million increase in that fund.
The city’s funds account for financial resources to be used for the acquisition or construction of capital facilities and projects, according to the presentation. Those funds come from the Transportation Benefit District, governmental capital and all utility capital.
“These are outlined in our capital facilities plan in detail,” Carrizosa said.
Following the presentation, the city council voted to extend the property tax public hearing to Nov. 18, when the adoption of the property tax ordinance also is expected to occur.
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Reporter Emily Hanson can be reached by email at emily.hanson@peninsuladailynews.com.
