The city of Ridgefield continues to shift its reliance away from residential construction revenues toward a more stable retail sales tax base. The Ridgefield City Council got its first look Thursday, Oct. 16, at the city’s preliminary 2026 budget during a workshop led by Finance Director Kirk Johnson.
“We are transitioning from a dependence on residential construction to a more sustainable ongoing retail sales tax structure,” he said during the meeting.
Johnson said the session was meant to tie together the city’s operating and capital budgets and highlight updates since the council’s last review.
“Reality is we probably won't have a very long study session because we have gone over this information pretty significantly,” Johnson said. “But I just wanted to kind of set the stage.”
He said the proposed budget reflects modest adjustments in both revenue and spending. That includes a small drawdown in the city’s general fund reserves to cover expected retirements and the use of separation reserves set aside for that purpose.
“Our estimated reserves (are) going down slightly in the general fund next year,” Johnson said. “The reason for that is we're using the separation reserve because we do have some expected retirements next year.”
According to Johnson, total estimated reserves across all city funds will grow to roughly $10.4 million. The general fund is projected to decline slightly, by 0.27%, to about $4.15 million, while the Water Fund and Storm Fund will see modest gains. Ridgefield’s Real Estate Excise Tax (REET) fund, a major contributor for capital and infrastructure work, is projected to rise nearly 20% to about $2.8 million.
Among the assumptions built into the 2026 plan are a 1% increase in property tax collections, worth about $25,000, and inflationary utility rate adjustments. Johnson said the city expects roughly $4.5 billion in assessed value next year, up about $500 million from the current total.
Revenue projections for 2026 also factor in a 3% water rate increase, a $2.76 bi-monthly stormwater fee hike per equivalent dwelling unit, and a 2.7% inflation adjustment to impact fees and water system development charges under city code. The city’s new construction value is estimated at nearly $174 million.
Johnson explained that while the city is working to reduce its reliance on residential construction revenue and build a more stable retail sales tax base, the slower pace of commercial growth has prolonged this shift.
“Initially we thought that we would be more through the transition by the end of 2026,” Johnson said. “With the uncertainty in the economy right now at the federal and the state level, we have seen slower construction. … We’ve extended that really to 2028 to really see what that looks like.”
Johnson noted retail sales tax revenues are running slightly below forecast due to fewer new business openings but said overall collections are still close to target.
“Retail sales tax is down a little bit from what I did initially expect again because we haven't had all the businesses open that I expected to open,” he said. “Initially, I forecast 20% increase in retail sales tax. We're about 16% right now.”
Council members also discussed whether to retain $50,000 in the budget for work previously contracted with the Watershed Alliance, which plans to close by the end of the year. After brief discussion, council members agreed to leave the funding in place and seek new partners to complete the environmental work.
Later in the meeting, Johnson announced the city received a $175,000 Department of Justice grant to support police recruitment efforts.
“We were kind of surprised to get a notification as they were shut down,” he said. “We’re not sure if it came from … but we do have an award email.”
The capital portion of the 2026 budget includes funding for several projects, including the Hayden Park playground, improvements at Horns Corner, and safety work at Boyse Street, all contingent on grant awards. The city was denied a Clark County grant this year but plans to reapply for other sources.
Johnson also reported that Ridgefield has secured a $400,000 low-cost brownfield loan from the state Department of Commerce to assist with environmental monitoring at the Park Laundry site, with up to half of the loan potentially forgivable.
By the end of 2026, the total city budget is projected at roughly $81.3 million, with about $80 million in revenue. Ridgefield expects to finish the year with an overall fund balance of $26.7 million.
Next steps include a Nov. 6 public hearing on city revenue sources and first readings of the property tax levy and utility rate ordinances, followed by additional hearings on Nov. 20 and Dec. 4. Final adoption of the 2026 budget is scheduled for Dec. 4, after which the city will transmit the adopted plan to the Municipal Research and Services Center and the State Auditor.
“We have to release [the budget] by November 1,” Johnson said. “We’re working on our online digital budget book. It’s a newer version this year, pretty cool with some of the dynamic stuff in it.”
