Pedestrians cross the street in front of Edmonds City Hall on Thursday, Dec. 28, 2023 in Edmonds, Washington. (Olivia Vanni / The Herald)

Pedestrians cross the street in front of Edmonds City Hall on Thursday, Dec. 28, 2023 in Edmonds, Washington. (Olivia Vanni / The Herald)

Edmonds mayor makes first pitch of plan to fill $20.5M budget deficit

The city used $12.5 million in one-time funds and $8 million from reserves to balance its 2024 budget — with a deficit looming.

EDMONDS — The city’s 2024 budget seemed balanced enough, with $51.9 million in general fund expenses and $51.1 million in projected revenues.

The catch?

To get there, Edmonds had to use $12.5 million in one-time funds and $8 million from the city’s emergency reserves.

Last year, the council approved using $6.25 million in federal COVID relief money to pay its annual contract with South County Fire. The city also saved $3.2 million through a hiring freeze last year, but those positions will likely need to be filled again, Mayor Mike Rosen said at his State of the City address in late March.

Edmond’s newly elected mayor Mike Rosen on Wednesday, Nov. 15, 2023 in Edmonds, Washington. (Olivia Vanni / The Herald)

Edmond’s newly elected mayor Mike Rosen on Wednesday, Nov. 15, 2023 in Edmonds, Washington. (Olivia Vanni / The Herald)

On top of dipping into reserves and using COVID relief dollars, the city also spent $3 million on so-called unbudgeted expenses” this year, such as union contracts, police technology, library repairs, new finance software and more. Altogether, this leaves Edmonds with a $20.5 million hole not covered by the city’s projected revenue.

From 2019 to 2023, city revenues grew by 27.8%, Rosen said, but expenditures grew by 44.9%. Most of the increases came from staffing costs, he said, as the city upped salaries to stay competitive with neighboring cities.

Inflation spiked city costs by 21.7% over the past three years, but state law only allows cities to increase taxes by a maximum of 1% annually.

“That’s pretty much a recipe for a slow death if your costs are going up by that kind of pace and you can’t increase your revenue by anywhere near that,” Rosen said in his speech.

To address budget issues, Rosen assembled a “Blue Ribbon Panel” of six local volunteers with expertise in finance and economics to provide recommendations to fix the city’s budget. The committee is led by Mike Bailey, former finance director for the city of Everett. Edmonds contracted with him for $10,000.

The committee will hear from residents before making recommendations to the City Council. A town hall meeting is set for 7 p.m. April 18 at the Edmonds Public Works building at 7110 210th St. SW in Edmonds.

Bailey said the panel doesn’t have a timeline for presenting ideas to the council.

Not only does Edmonds need to get out of a deficit, it also needs to find ways to increase revenue. The city could do this by adjusting rental and concession rates, reviewing the city’s investment policy, selling city assets and ramping up efforts to pursue grants, Rosen said.

Bailey offered four options for the city to “bridge” its budget to 2025:

• Reduce city expenses, with a potential goal of cutting 25%;

• Seek voter approval for tax increases;

• Borrow internally from other city funds to provide short-term relief; or

• A combination of the three options.

City Council member Michelle Dotsch said the city should do all it can to cut spending before asking for tax increases.

“We need to take a hard look at our expenditures first,” Dotsch said at the council meeting. “Unless we really tighten our belt and we ask the community to tighten theirs, that’s just going to fall on deaf ears.”

The panel is also set to help Edmonds rework its budget process. For example, the city is changing to a biennial budget, rather than an annual one. Bailey is a “huge advocate” for biennial budgets, he said at the City Council meeting.

“I just think it kind of helps you lift your horizon up longer term and think on a bigger scale,” Bailey said.

Bailey also recommended monthly department budget reviews, along with a “robust” citywide mid-year review to keep a closer eye on how city money is spent. He proposed taking a “zero-based” or “priority-based” approach to the budget.

Rosen presented a potential timeline for how the city could get its budget on track:

• 2024: Reduce city expenses, “develop (a) strategy to replenish reserve funds” and “resolve fire service costs and issues” with South County Fire’s impending termination of its contract with Edmonds at the end of 2025;

• 2025 to 2026: Use a new budget process to fill future gaps, identify potential savings and other revenue requirements.

Council member Vivian Olson said the timeline was “aggressive,” but reasonable given the city’s financial situation.

“It’s aggressive,” Bailey acknowledged, “but its doable.”

Town hall meeting

What: The Edmonds City Council will host a town hall meeting to discuss “the city’s budget challenges and proposed steps to fiscal resiliency, options for Edmonds fire services, and the 2024 Comprehensive Plan. Questions will be taken from those attending in person or remotely via Zoom.”

When: 7 p.m. April 18.

Where: Edmonds Public Works building, 7110 210th St. SW.

Ashley Nash: 425-339-3037; ashley.nash@heraldnet.com; Twitter: @ash_nash00.

Talk to us

> Give us your news tips.

> Send us a letter to the editor.

> More Herald contact information.

More in Local News

Snohomish residents Barbara Bailey, right, and Beth Jarvis sit on a gate atop a levee on Bailey’s property on Monday, May 13, 2024, at Bailey Farm in Snohomish, Washington. Bailey is concerned the expansion of nearby Harvey Field Airport will lead to levee failures during future flood events due to a reduction of space for floodwater to safely go. (Ryan Berry / The Herald)
Harvey Field seeks to reroute runway in floodplain, faces new pushback

Snohomish farmers and neighbors worry the project will be disruptive and worsen flooding. Ownership advised people to “read the science.”

IAM District 751 machinists join the picket line to support Boeing firefighters during their lockout from the company on Thursday, May 16, 2024, in Everett, Washington. (Ryan Berry / The Herald)
Amid lockout, Boeing, union firefighters return to bargaining table

The firefighters and the planemaker held limited negotiations this week: They plan to meet again Monday, but a lockout continues.

Julie Timm
Sound Transit’s $375K payout to ex-CEO didn’t buy help

Board members said Julie Timm would give professional advice to them or a future CEO after leaving, but she hasn’t been called upon.

FILE -- An engine on a Boeing 767 jet aircraft, at a Boeing facility in Everett, Wash., March 7, 2012. The Boeing 737 engine that failed on Southwest Flight 1380 is not the only one that has caught the eye of regulators: Engines on Boeing's 787 Dreamliner and 767 have also failed, prompting questions about their design and inspection procedures. (Stuart Isett/The New York Times)
Boeing 767, built in Everett, gets 5-year lifeline from Congress

Boeing would have been forced to end production of the 767 Freighter in 2027 due to new emissions rules if not for the extension.

Snohomish County Jail. (Herald file)
Inmate, 51, dies at Snohomish County Jail

Around 3 p.m., corrections staff called 911 about an inmate, who became unresponsive as firefighters arrived. He died at the scene.

With the Olympic mountains in the background, Boeing's 777x lifts off from Paine Field on its first flight, to Boeing Field in Seattle, on Saturday, Jan. 25, 2020 in Everett, Wash. (Andy Bronson / The Herald)
1 dead, dozens injured after turbulence on Boeing plane

A Singapore Airlines flight from London was diverted to Bangkok, where more than 70 people were being treated for injuries.

Two people fight on the side of I-5 neat Marysville. (Photo provided by WSDOT)
Idaho man identified in fatal trooper shooting on I-5 near Everett

The deceased man was Marvin Arellano, 31, of Nampa, Idaho, according to the Snohomish County Medical Examiner’s Office.

State Sen. Mark Mullet, left, and Attorney General Bob Ferguson, are both running as Democrats for governor in 2024. (Photos provided)
Did Bob Ferguson go too far responding to fellow Fergusons?

Ferguson wanted the secretary of state to redo the ballot. Mark Mullet, a Democratic rival, says such a move would’ve broken the law.

Photo by Gina Shields of GM Photography
Whidbey Island to salute the fallen for Memorial Day

All are invited to honor those who have fallen at three events on Whidbey Island.

Boeing firefighters and supporters hold an informational picket at Airport Road and Kasch Park Road on Monday, April 29, 2024, in Everett, Washington. (Annie Barker / The Herald)
Boeing union firefighters to vote on new contract proposal

The company made the offer after “a productive session” of bargaining and reported the amended contract includes an “improved wage growth schedule.”

Catholic Community Services NW Director of Housing Services and Everett Family Center Director Rita Jo Case, right, speaks to a man who asked to remain anonymous, left, during a point-in-time count of people facing homelessness in Everett, Washington on Tuesday, Jan. 24, 2023. (Annie Barker / The Herald)
Homelessness down nearly 10% in Snohomish County, annual count shows

The county identified 1,161 people without permanent housing, down from 1,285 last year. But lack of resources is still a problem, advocates said.

Snohomish County Deputy Prosecutor Craig Matheson on Wednesday, May 15, 2024 in Everett, Washington. Matheson retires this month after 35 years in the prosecutor's office. (Olivia Vanni / The Herald)
For decades, he prosecuted Snohomish County’s most high-stakes cases

“When you think of a confident prosecutor, you see a picture of Craig (Matheson) in the dictionary.” Or in the thesaurus, flip to “prepared.”

Support local journalism

If you value local news, make a gift now to support the trusted journalism you get in The Daily Herald. Donations processed in this system are not tax deductible.