EVERETT — The city of Everett needs to cut back on spending to stay financially afloat, according to Mayor Cassie Franklin.
Franklin on Friday is expected to issue her fifth mayoral directive, akin to an executive order, this time tackling the city’s long-term budget challenges.
“Our remaining options are not easy ones … ” she said. “We can no longer avoid taking more difficult measures to solve this serious and growing problem.”
Everett’s revenue projections are not keeping pace with spending. The cost of local government is mushrooming, particularly staffing and benefits. Public agencies are limited — legally and politically — in how much they can increase taxes and other sources of income.
City leaders for years have acknowledged the long-term budgeting issue in Everett, known as the structural deficit. The directive represents Franklin’s first official response as mayor.
The city is facing a potential $13 million deficit in 2019, and the gap worsens from there, Franklin said. For context, the 2017 general fund budget was $131.7 million, most of which went toward staffing. The majority of general fund revenue comes from business taxes, sales tax and property tax.
Everett saw a bit of a reprieve in 2015 and 2016 due to the construction boom, but the uptick didn’t hold for 2017, she said. Furthermore, the city still is working on a backlog of overdue costs that were deferred during the Great Recession, such as vehicle replacements and maintenance projects.
Some savings in recent years have stemmed from unfilled police officer positions, but the city has ramped up recruitment efforts, and Franklin has committed to making all those hires in 2018. Her office says that promise hasn’t changed. Many of the officer vacancies are related to a generational wave of retirements. The fire department faces a similar situation.
The directive lays out a number of ways Franklin will gather information for future decisions.
It creates a structural deficit team that will begin meeting monthly, starting March 7. Members include the elected officials from the City Council’s budget committee, which is chaired by Councilman Scott Murphy. He is supportive of the mayor’s initiative to control rising costs, he said in a prepared statement.
The mayor also said she’s looking hard at all vacant positions and considering whether any should be eliminated.
“We are still hiring,” city spokeswoman Meghan Pembroke said. “We’re just evaluating each position on a case-by-case basis.”
The city has the equivalent of about 1,202 full-time employees. As of Feb. 1, there were 40 vacancies. Some empty positions were eliminated in earlier cuts, meaning there are fewer left to consider, the mayor said.
Every department is tasked with submitting recommendations for services that can be reduced or axed. The deadline is the end of March. The departments also will be asked to cut back on expenses related to travel and training.
City employees are being encouraged to offer their ideas for savings. That input will be studied as well as the findings of a similar review in 2014, Franklin said. A report on that front is due to the mayor in May.
City-provided health benefits will be assessed, including the deductible levels and the potential for a health clinic for city employees, which could save money, Franklin said. Many of those benefits are negotiated through labor contracts.
Some changes have taken place in that regard in recent years, saving millions. Most city employees and police officers now pay 10 percent of their health insurance costs. Firefighters pay 5 percent, the result of a labor ruling.
The directive says four city departments in particular could explore changes to the way they deliver services: fire, transit, parks and libraries.
Franklin also has suggested the city expand its corps of volunteers as a cost-saving measure.
Since taking office, Mayor Cassie Franklin has issued five directives on the following topics:
Jan. 11: Gang and youth violence.
Jan. 24: Economic development.
Jan. 25: Getting people involved in local government.
Jan. 26: Continuing the Safe Streets Initiative, which focuses on homelessness, mental health and addiction.
Feb. 23: The structural deficit in the city’s budget, which means that spending outpaces revenue in the long term.