First reading of Yelm’s mid-biennium budget shows minor changes ahead

Though no official action was taken, Stephanie Nanavich, Yelm finance director, presented the first reading of the city’s mid-biennium budget in a public hearing during a Yelm City Council meeting on Tuesday, Nov. 12.

Per RCW 35A.34.130, the City of Yelm is required to review and adopt a mid-biennium budget adjustment no later than Dec. 31, 2025.

During the meeting, Nanavich told council members that numbers in the mid-biennium will continue to change as the City of Yelm continues to narrow down its estimates in the budget.

“We are required to do this mid-biennium budget review. We’ve had some discussions already,” Nanavich said. “Some of the bigger items, as you know, we settled all of our contracts by the beginning of this year. We will be having some salary and benefit adjustments because when we did the original budget, we were working on estimates. Now that we have known figures, we can shore up those numbers.”

Nanvich highlighted some of the items in the 2025-26 mid-biennium budget and said the City of Yelm will have additional costs from the police academy now that the city is “paying more of that cost themselves.” She noted this is about $15,000 per year.

Additionally, the City of Yelm will remove a line item in relation to the Water Reclamation Facility (WRF) until 2027, when its payments are due. According to Nanavich, the city must complete the project before the Department of Ecology asks for the loan to be repaid.

“We thought the Department of Ecology loan for the WRF, that we’d have to start paying that this year. Come to find out we won’t have to start paying principal interest on that loan until 2027, and so we’re going to remove those line items from the 2025-26 mid-biennium budget,” Nanavich said.

Councilor Tracey Wood asked Nanavich if the city was already budgeted to begin making payments on that loan, and if it would be a better idea to begin making those payments now to avoid “additional interest” it would have to pay by pushing payments back.

“The problem is we don’t have the final loan amounts. They haven’t calculated our amortization schedule for that loan yet,” Nanavich said. “They’ve given us some preliminary ones but we don’t have the final, so we don’t have the numbers to start paying it. Honestly, Department of Ecology would probably say, ‘no, we’re not taking that yet because it’s not due.’”

She added that there are several capital projects that began in 2025 but weren’t completed, and will rollover into 2026.

“There’s not a whole lot of brand new capital projects,” Nanavich said. “Probably the Veterans Memorial Park if we get funding lined up for that. You’ll see that start happening, if there’s some movement on that, in 2026.”

The mid-biennium budget will be brought back before council and the community for a second reading and a second public hearing. Nanavich noted she’ll present more current changes during that reading.