Dreamliner delay costs Everett $2 million in revenue

Published 12:01 am Thursday, March 10, 2011

EVERETT — Boeing’s failure to deliver the first 787s on time is affecting more than its customers.

The city of Everett had added an extra $2 million into this year’s revenue estimates, expecting to collect when Boeing began delivering its first Dreamliners late last year.

That didn’t happen.

An electrical fire on one of the test airplanes grounded the fleet for nearly two months and forced Boeing to push back delivery until the third quarter of this year.

The city can’t collect until the planes are delivered.

And it isn’t just the revenue from Boeing. The city also may have to pay two telephone service providers refunds. The companies are seeking utility tax refunds for the previous seven years on what they refer to as “charges for access to interstate services.” The city isn’t sure how much yet that might cost them.

City officials were left with two choices: make more cuts or draw money from someplace else. The city chose the latter.

The City Council is expected to vote on a budget amendment next week that would pull money from a contingency fund to cover the difference.

That seemed a better alternative than asking department managers to make yet more cuts, said Everett Chief Financial Officer Debra Bryant.

“Rather than going back to departments, we’re trying to get ahead of the curve,” she said.

Everett has been cutting back on spending since 2008 when city staff first noticed revenues falling apart.

The city pays for its basic operations mostly with revenue from sales tax, business-and-occupation tax and property tax. So far, Everett has been able to avoid layoffs and furloughs.

Money-saving efforts actually left the city with more money at the end of 2010 than expected, Bryant said. It’s from that pool of $3.1 million the city plans to pull cash to cover the lost tax money from Boeing.

The remaining $1.1 million will be moved into a capital fund for major projects such as the replacement of the Broadway bridge, which spans the main line of the railroad.

This is the first time the city has been able to do that in four years, she said.

Debra Smith: 425-339-3197; dsmith@heraldnet.com.