MRSC - Budget Preparation Procedures for Counties

Budget Preparation Procedures for Counties

This page provides a step-by-step overview of the required budget procedures for counties in Washington State, along with tips and recommendations to help you with the process.

It is part of MRSC's series on Budgeting in Washington State.

For a quick overview of the statutory deadlines for the current budget preparation year, see our page Budget Calendar for Counties.

Budget Statutes

Annual Budgets

The annual fiscal period for counties is January 1 to December 31. Annual budget requirements for counties are provided in chapter 36.40 RCW.

Biennial Budgets

Counties also have the option to adopt a biennial (two-year) budget for any or all of their funds, and a small number of counties currently use this process (RCW 36.40.250). During a biennial budgeting year, the same dates and procedures are used as the annual budget process. Counties using the biennial budget process are also required to complete a mid-biennium review and modification prior to the beginning of the second year of the biennium. For more information, see our page Biennial Budgeting.

Alternative Budget Dates

The statutory deadlines for the county budget process culminate with a public hearing and budget adoption in October. However, RCW 36.40.071 allows counties to use an alternative budget adoption process culminating in December and to adjust the other budget deadlines as needed to meet the later deadline. Most counties use this alternative budget process.

The procedures below list the statutory deadlines for the October timeline, but the same general budget preparation procedures apply to all counties regardless of which dates are used. For examples of county budget calendars using alternate dates, see our page Budget Calendar for Counties.

Pre-Budget Items

There are a few items that are not addressed within the budget statutes but are considered essential to local government financial planning. For example:

Strategic planning sessions, budget retreats, and financial policy updates provide direction and focus to the budget process.
Capital facilities plan updates are required for GMA counties, and capital improvement plan updates are vital to the budget planning process for partially planning GMA counties.
Updating your cost allocation formulas and data will help enhance the budget forecasting numbers.

We suggest that you consider incorporating these pre-budget steps into your budget calendar.

For help crafting your financial policies and procedures, see our Financial Policies Tool Kit, which provides detailed guidance and key questions to consider for a number of financial topics, as well as links to best practices and sample documents from other jurisdictions.

Step 1: County Auditor or CFO Issues Budget Request

Statutory Deadline: On or before the second Monday in July (RCW 36.40.010), but can be altered to conform with the alternative budget setting process (RCW 36.40.071).

The county auditor, or chief financial officer (CFO) in a charter county, notifies in writing each county official, elective or appointive, that is in charge of an office, department, service, or institution of the county, to prepare detailed and itemized estimates of the probable revenue from sources other than taxation, and of all expenditures required for the ensuing fiscal year.

The county auditor or CFO prepares the estimates for interest and debt redemption requirements and all other estimates which properly fall within the duties of their office (RCW 36.40.030).

Practice Tip: Budget proposals are made up of estimates and predictions about the future that are often based on historical data and trends. Historical sales tax and property tax data can be obtained from the state Department of Revenue (DOR) website (sales taxes and property taxes) or the Local Government Financial Reporting System maintained by the State Auditor’s Office. To help with evaluating the data, GFOA provides guidance in the form of best practice articles such as Financial Forecasting in the Budget Preparation Process.

Step 2: Estimates Filed with County Auditor or CFO

Statutory Deadline: On or before the second Monday in August (RCW 36.40.010), but can be altered to conform with the alternative budget setting process (RCW 36.40.071).

All county officials notified of the budget request must file estimates of revenue and expenditures for their programs and/or departments within 30 days.

The county commissioners must submit to the county auditor a detailed statement, prepared by the county road engineer or special projects engineer, of all new road and bridge construction to be financed from the county road fund and/or from bond issues. This statement must also include estimates for the road and bridge maintenance program (RCW 36.40.020).

Practice Tip: A uniform budget request form can help officials provide estimates consistent with the budget objectives and statutory requirements (RCW 36.40.030).

Step 3: County Auditor or CFO Prepares Preliminary Budget

Statutory Deadline: Immediately following the receipt of revenue and expenditure estimates (RCW 36.40.040).

Upon receipt of the estimates, the county auditor or CFO must prepare the preliminary county budget setting forth the complete financial program, showing the expenditure program and the sources of revenue by which it is to be financed. The statute requires that the revenue and expenditure sections of the preliminary budget document be presented for each office, department, or service in a format that displays:

Last year’s actual expenditures.
Actual revenues and expenditures for the first six months of the current fiscal year (including contracts and obligations against current appropriations).
Budgeted expenditures/appropriations for the entire current fiscal year.
Proposed revenues and expenditures for the coming fiscal year. The revenue section must include the amount to be raised from taxation and the estimated surplus at the close of the current fiscal year.

Sample Format

	Last Year's Actuals	Current Year Budget (Expenditures Only)	Current Year Actuals Through June 30	Budget Proposal
Department Revenue	$750,000.00	-----	$425,000.00	$800,000.00
Department Expenditures	$749,000.00	$775,000.00	$450,000.00	$800,000.00

Step 4: County Auditor or CFO Files Preliminary Budget with Commissioners

Statutory Deadline: On or before the first Tuesday in September of each year (RCW 36.40.050), but can be altered to conform with the alternative budget setting process (RCW 36.40.071).

The county auditor or CFO must submit the preliminary budget to the board of commissioners, which must then consider the preliminary budget and make any revisions or additions it deems advisable.

Practice Tip: Preparing a balanced budget is one of the most challenging tasks. Articles such as The Economy is Better – So Why is My Budget So Hard to Balance? by Mike Bailey and Achieving a Structurally Balanced Budget, a GFOA best practice guide, will provide some insight.

Step 5: Commissioners Distribute Preliminary Budget to Public

Statutory Deadline: No later than two weeks immediately preceding the final budget hearing, which is set for either the first Monday in October or December depending upon the budget dates selected by the county commissioners (RCW 36.40.060 or 36.40.071).

Practice Tip: There are many different ways of communicating budget information. While the full budget document may be useful for the legislative body, simpler, more engaging versions that balance text and numbers with simple graphs are a better way of helping the public understand the budget story. Budget-At-A-Glance documents are a popular tool that counties use. Recently, some counties have started experimenting with online budget portals. See our page Communicating Your Budget to the Public for ideas and examples.

Step 6: Commissioners File Public Notice of Budget Hearings

Public notice is required for each public hearing that must be held during the budget process. The number of public hearings held during the budget process may vary depending upon county policy or procedure. At a minimum there should be two hearings: a revenue hearing (see Step 7) and a final budget hearing (see Step 9).

Statutory Deadline: For the final budget hearing, not later than two weeks immediately preceding the first Monday in October (approximately mid-September, see RCW 36.40.060). If the alternative budget setting process has been selected, no later than two weeks immediately preceding the first Monday in December (approximately mid-November, see RCW 36.40.071).

The county commissioners must publish a notice that they have completed the preliminary budget and that they will meet on the first Monday in October (or December if the alternative adoption method has been selected) for the purpose of fixing the final budget and making tax levies. The notice must be published once a week for two consecutive weeks in the official county newspaper, immediately following filing of the preliminary budget.

Step 7: Public Hearing on Property Tax Revenues

Statutory Deadline: On or before November 30 if using the alternative budget process culminating in December (RCW 84.55.120), or before the final public hearing (the first Monday in October) if using the October budget deadline.

The legislative body must hold a public hearing on revenue sources for the coming year's budget, including consideration of possible increases in property tax revenues, prior to the adoption of the ad valorem/property tax certification deadline, which is November 30 (see Step 8 below).

The public hearing and adoption of the property tax levy must be completed prior to the final budget hearing. Since implicit price deflator (IPD) figures are released on or around September 25, which determines whether or not the county needs to file a resolution of substantial need to increase its property tax levy, counties using the October timeframe would have to hold the hearing within a roughly one-week window between the release of the IPD and the first Monday in October.

Practice Tip: The county board of commissioners must set by ordinance or resolution the amount to be raised by the property tax. For examples, see the DOR website. If the county wants to increase its levy amount as allowed by law or bank its levy capacity, the legislative body must adopt a resolution or ordinance stating the increase in terms of both dollars and percentage. If the percentage is less than the lawful limit the remainder will be banked. However, if the implicit price deflator is lower than 1%, counties with a population of 10,000 or greater must also adopt a resolution of substantial need to levy or bank the full 1% increase. See our property tax page for additional information.

Step 8: Commissioners Certify Levy to Assessor

Statutory Deadline: November 30 (RCW 84.52.070).

By November 30, the board of county commissioners must certify to the county assessor the amount of property taxes to be levied upon the property within the county for the coming fiscal year. If your county misses the November 30 deadline, you may not increase the levy amount above the prior year’s level. See RCW 84.52.070(3).

If your county is using the alternate dates, some county officials have noted that there is a conflict between RCW 84.52.070, which requires levies to be certified by November 30, and RCW 36.40.071-.090, which require the board of commissioners to fix the levy amounts after the final budget hearing (beginning on the first Monday in December). However, counties must certify their levies by November 30 or else they risk losing any property tax increase for the upcoming year.

The Department of Revenue (DOR) provides examples of the required property tax increase ordinance/resolutions for local governments to meet this requirement.

Adopting the required ordinances and/or resolutions is a critical component of the budget process. If the implicit price deflator is lower than 1%, counties with a population of 10,000 or greater must also adopt a resolution of substantial need to levy or bank the full 1% increase.

Step 9: Public Hearing on Budget

Statutory Deadlines: Final budget hearing must be on the first Monday in October (RCW 36.40.070) or, if using the alternate date, the first Monday in December (36.40.071). The hearing may be continued from day to day, not to exceed a total of five days.

Practice Tip: The number of public hearings held during the budget process may vary depending upon local policy or procedure. At a minimum there should be two hearings, as reflected above – one on property tax revenues and one on the budget itself. See our tips for a successful public hearing for more information.

Step 10: Commissioners Adopt Budget

Statutory Deadline: Upon conclusion of the budget hearing and prior to the beginning of the next fiscal period (RCW 36.40.080).

The county legislative authority shall adopt the budget by ordinance or resolution and enter the same in the official minutes of the board.

Practice Tip: The budget resolution or ordinance can take on many forms depending upon whether the county adopts at the office, department, or program level, and whether it includes ending fund balance or displays appropriations separately from ending fund balance. The budget resolution format adopted should be consistent with the detailed budget document approved by the legislative body.

Step 11: Submit Adopted Budget to SAO

Statutory Deadline: No specific deadline given, but we recommend sending to the State Auditor's Office (SAO) immediately following adoption of the final budget (RCW 36.40.080).

A copy of the final adopted budget must be transmitted to SAO, which has advised us that they prefer electronic copies of the budget (preferably a web link or, if your county does not post the budget online, a PDF attachment) to be emailed to WAStateAuditorSubscriptions@sao.wa.gov, with the county name and the word “budget” in the subject line.

Last Modified: April 02, 2021

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