Council advances 2026 budget supplement and authorizes start of utility bond process up to $11 million
May 04, 2026 | Port Townsend, Jefferson County, Washington
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The Port Townsend City Council on May 4 advanced the city’s first 2026 budget supplement and authorized staff to begin the procurement process for professional services needed to prepare utility revenue bonds.
Staff framed the supplement as primarily housekeeping and carryforward work: money set aside for projects that did not complete last year, updated cost-allocation methodology for internal services, and refreshed ER&R (equipment replacement) plans. Staff said carryforward costs include capital projects with an estimated $500,000 identified for a water replacement project and that updates to the cost-allocation plan would, in aggregate, increase general-fund allocations by roughly $200,000.
Staff also described IT ER&R methodology changes, shifting some allocation drivers from headcount to devices and storage; the presentation estimated about $60,000 in net IT ER&R adjustments (roughly $27,000 operating and $32,000 replacement) with downstream impacts to some department overheads.
On the financing side, staff asked the council to authorize the city manager to negotiate and execute contracts for professional services (bond counsel, financial adviser) to support issuance of utility revenue bonds and to evaluate refinancing options on existing debt. Staff said the authorization would allow the city to issue requests for proposals and is a preparatory step; actual issuance would require a subsequent bond ordinance and further council approvals. Staff’s preliminary estimate of the financing need was about $11,000,000; staff emphasized that figure is subject to change through design, grant awards and the final rate study.
A council member moved for first reading of the 2026 supplemental budget ordinance and the motion carried on a voice vote. The motion to authorize procurement of bond counsel and financial advisers was also made; staff will return with more detailed recommendations and a bond ordinance for council approval if the city proceeds to market.
Staff framed the supplement as primarily housekeeping and carryforward work: money set aside for projects that did not complete last year, updated cost-allocation methodology for internal services, and refreshed ER&R (equipment replacement) plans. Staff said carryforward costs include capital projects with an estimated $500,000 identified for a water replacement project and that updates to the cost-allocation plan would, in aggregate, increase general-fund allocations by roughly $200,000.
Staff also described IT ER&R methodology changes, shifting some allocation drivers from headcount to devices and storage; the presentation estimated about $60,000 in net IT ER&R adjustments (roughly $27,000 operating and $32,000 replacement) with downstream impacts to some department overheads.
On the financing side, staff asked the council to authorize the city manager to negotiate and execute contracts for professional services (bond counsel, financial adviser) to support issuance of utility revenue bonds and to evaluate refinancing options on existing debt. Staff said the authorization would allow the city to issue requests for proposals and is a preparatory step; actual issuance would require a subsequent bond ordinance and further council approvals. Staff’s preliminary estimate of the financing need was about $11,000,000; staff emphasized that figure is subject to change through design, grant awards and the final rate study.
A council member moved for first reading of the 2026 supplemental budget ordinance and the motion carried on a voice vote. The motion to authorize procurement of bond counsel and financial advisers was also made; staff will return with more detailed recommendations and a bond ordinance for council approval if the city proceeds to market.
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