COBI has roughly $18 million in reserves

Published 1:30 am Wednesday, May 27, 2026

The Bainbridge Island City Council received an economic forecast, including learning that the city has roughly $18 million in reserves, as part of its May 19 study session.

DeWayne Pitts, director of finance and administrative services, confirmed the city is above emergency reserves with city policy requiring 25% of ongoing revenue plus $1.5 million, or roughly $9 million. Pitts estimates the current funds sit at roughly $18.5 million, adding, “it will take a while to kind of weed that down to hitting our policy required reserves.

“In a nutshell, a baseline budget, often referred to as a status quo budget, provides a short and long-term forecast using existing conditions…using current staffing, current service levels, and the Capital Improvement Plan already in place,” Pitts said.

Deputy mayor Kirsten Hytopoulos provided her perspective on the discretionary portion of the city budget. “I know in the past we have had some cool budget stuff, like visualizations for the public to really understand. One of the most important things for the public to understand perennially is that our discretionary portion of our budget is very small, as well as the fact that our portion of their property tax bill is very small,” she said.

Pitts described the 2026 budget as the baseline the city uses to forecast forward. “The baseline budget really is the starting point. It provides a short-term forecast for 2027 and 2028, but it also gives a longer-term…forecast as well, and that really is to show how current spending decisions affect future financial capacity going forward and sustainability. It’s likely again that some of our assumptions are going to change as the year unfolds,” he said.

Councilmember Mike Nelson asked about tax increases, with Pitts confirming that no tax increases are currently expected.

The 2026 modified budget is roughly $52.5 million, Pitts said. The majority of the budget comes from taxes, charges for utility services, intergovernment revenue, fees and service charges, among others. The money covers salaries/benefits, capital, other services & charges, debit services, and professional services, among others.

Pitts described revenue levels as stable, adding, “recurring revenues and ongoing costs are in balance as a baseline effort, at least at this point in time, until we make any assumption changes. It reflects a very stable structural starting point for the forecast, and I would say that our current approach supports maintaining existing service levels,” Pitts said.

Pitts also shared that the city is mindful of inflation throughout the budget process. “Of course, [inflation] has a major component of our budget, anticipating costs, so we need to take a look at inflation very closely to see how that’s going to affect our costs,” he said. Pitts said inflation currently sits around 4.9% as of April 2026.

Over the summer, staff will develop the 2027-2028 proposed operating budget as well as the 2027-2032 Capital Improvement Plan, before bringing it back to council in September. The process requires council review and holding public hearings.