Everett council approves $644M budget with cuts to parks, libraries

EVERETT — The Everett City Council unanimously approved a $644 million budget for 2025 on Wednesday, and with it, reductions to a number of city services.

Cuts are coming to street repair, parks, libraries as well as several governmental services. Thirty-one employees are losing their jobs; others will be furloughed. Those cuts helped close the gap on a looming $12.6 million deficit left after voters rejected a property tax levy lid lift in August.

In 2025, Everett’s general fund revenue will total $169 million, while its expenditures will total $173.7 million, a gap of $4.7 million. In the 2025 budget book, the city states the budget is “statutorily balanced,” as required by state law, counting the beginning fund balance as a source of revenue. A “structurally balanced” budget would have expenditures match estimated revenue.

“The practice of passing budgets that include the use of fund balance is in line with state law and budgetary rules,” city spokesperson Simone Tarver said in an email. “Just as businesses use reserves to cover shortfalls, municipalities, such as the City, are also allowed to rely on fund balances to manage their fiscal health. The practice is well-established, legally permissible, and part of how the City manages its finances in a practical, responsible manner.”

The general fund’s ending balance is budgeted at $33.8 million, equivalent to 20% of the city’s operating revenue in 2025. That number is used as an estimate because Everett policy requires the ending fund balance to at least match that 20% mark.

The actual balance won’t be known until the second quarter of 2026, and is expected to be higher, city Finance Director Heide Brillantes said. On average, over the past decade, actual ending balances in the city’s general fund have been higher than the budgeted estimates due to under expenditures and revenue that outperforms projections, Tarver said. Actual ending balances have averaged 31% of general fund revenues over the past decade, higher than the budgeted 20%.

“Keep in mind that fund balance is intended to be a financial safety net for the city, not a savings account that should continue to grow and grow,” Tarver said in an email. “Our priority is to maintain a very healthy actual fund balance and we are doing so.”

‘I’m pretty alarmed’

Scott Murphy, a former Everett City Council member who is also running for mayor in 2025, has raised concerns over the city’s budget for weeks at public meetings. On Wednesday, he spoke against using the fund balance to close the gap in the general fund. He also warned of a six-year outlook released by the city showing Everett will be insolvent by 2029 if no additional cuts are made or revenues arise.

“I’m pretty alarmed, I assume you are all, as well,” Murphy said. “To see that the city will be insolvent in 2028 is a shocking forecast for the city to be issuing.”

Forecasts projecting major deficits in Everett’s general fund are nothing new, Brillantes said, because the city has suffered from a structural deficit for more than two decades. In 2001, voters approved statewide Initiative 747, limiting municipalities to an increase of property tax levies by only 1% annually, lower than the rate of inflation.

Costs have risen and the need for services has increased as Everett’s population has grown. Cuts to those services became necessary to balance the budget every year due to stagnant revenue from property taxes, Everett’s largest and most stable form of revenue. Those cuts get more and more difficult as time goes on and the city continues eliminating programs.

City Council member Scott Bader said he has seen similar deficit projections since he first took office in 2012.

“I wish we had a structurally sound budget, but that is not something we will have until we have a revenue solution,” Mayor Cassie Franklin said Wednesday.

Everett looked to voters for a levy lid lift in August to help fund city services. The measure would have increased the city’s property tax levy rate from $1.52 per $1,000 of assessed value to $2.19 per $1,000. The average homeowner would have paid an additional $28 per month, according to a city estimate.

Voters resoundingly defeated the measure, with 59% against.

‘The so-called waste of government’

The general fund pays for essential city services like police, fire, libraries, parks and government operations. It is mostly funded by a mix of property, sales and business and operation taxes.

The largest expense in the general fund is public safety. The Everett Police Department, the city’s most costly general fund program, will receive $51.1 million, up from $50.8 million in 2024. Spending on police had increased by 18.6% from 2023 to 2024. The department’s budget makes up about 30% of the general fund.

The general fund is separate from non-general government operations, like Everett Transit, city golf courses, major capital improvement projects and water and sewer utilities. Money for non-general operations comes from fees, grants and utility, water and sewer rates. That money can’t be used to pay for general government functions.

Total budgeted expenditures for 2025, including general and non-general spending, total $644 million. It’s an increase of more than $200 million from the $439 million budget in 2024. That jump is primarily due to a water and sewer revenue bond the City Council plans to approve in the first half of 2025, Tarver said in an email. The bond will not require voter approval.

The bond will be issued to pay for the new Port Gardner Storage Facility that will provide temporary storage of stormwater and sewer overflows if the city’s sewer system is overloaded. Plans for that facility have been in the works since 2014.

It will also pay for the 36th Street Combined Sewer Overflow Storage improvement project, a new 1.8 million gallon underground storage tank for excess storm and sewer water to reduce flooding.

Although council members unanimously approved the budget, some had concerns over individual cuts. Bader was concerned over the cuts to street overlays, while Mary Fosse said she was frustrated over library cuts. Judy Tuohy also raised concerns over cuts to libraries, as well as parks and the use of ending fund balance to close the gap in the city’s budget.

Tuohy also hopes to include more City Council input on the budget process. The budget will be one of the main topics at the council’s annual retreat early next year. Options to close the budget gap in 2026 include joining a regional fire authority, joining the Sno-Isle library system or going for another levy lid lift, Tarver said in an email.

“Keep in mind that we did lay off 31 employees,” Council President Don Schwab said before voting Wednesday. “That’s no small item. I looked through the list and I can’t think of any service that I didn’t think needed to be provided. The so-called waste of government, I just didn’t see it.”

Will Geschke: 425-339-3443; william.geschke@heraldnet.com; X: @willgeschke.